02-11-2021, 12:45 AM
(02-10-2021, 11:52 PM)fenders53 Wrote: Their is an interview with Powell on CNBC. And you better hope they don't tighten. That would be very ugly for the markets now.I literally know jacks**t about whole macro thing, trying to learn, but what this guy basically saying( treasure advisory committee confirms it) there is too much liquidity in market so good possibility that fed is going to reduce creating M0(since a lot of it is landing in reserves anyway) and probably buy T bills( that's what they were doing back in 2019 which contributed to liquidity crises in March 2020). when deposits increase( possibly more helicopter cash, market selloff, reduced borrowings by consumers?) Banks buy t bill as collateral. Since fed will be buying and market all time high, any more cash deposits can create an issue.