No.richard5za wrote:The SP 500 futures on THursday showing a pre-open drop of some 0.7% Maybe this is the turning point?
Next round of mobilizations in global zones.
https://www.youtube.com/watch?v=kIKOmZD_Zj4
No.richard5za wrote:The SP 500 futures on THursday showing a pre-open drop of some 0.7% Maybe this is the turning point?
This is being described as a reaction to the surge in confirmedrichard5za wrote: > The SP 500 futures on THursday showing a pre-open drop of some
> 0.7% Maybe this is the turning point?
With stocks hitting record highs today, this hit the wires about 15 minutes ago at 3 pm eastern.Higgenbotham wrote:https://www.marketwatch.com/story/feds- ... 2020-01-29Fed’s Powell must clear up mistaken impression T-bill purchases are fueling stock bubble, former central banker says
Published: Jan 29, 2020 11:23 a.m. ET
Former New York Fed President says it’s important to push back given that the balance sheet expansion is going to end soon
Federal Reserve Chairman Jerome Powell must use his press conference later Wednesday to clear up the market’s mistaken impression that the central bank’s expansion of its balance sheet is fueling the rise in stocks, said former New York Fed President William Dudley on Wednesday.
“They need to explain very clearly why they are doing this — to add more reserves to the banking system and what are the consequences of that — and push back a little bit against this narrative that their T-bill purchases are fueling a big bubble in the equity market. I just don’t think that’s true,” Dudley said in an interview on Bloomberg Television.
Dudley said stocks are rising because the economy is healthy, earnings are solid and the Fed has signaled that it won’t even think about raising interest rates until inflation rises over its 2% annual target.
My take would be that the Fed is getting nervous about how big this bubble is getting. It's my guess that the market will test the Fed, knowing that the Fed is on the run, and make the Fed "do something" to break the bubble rather than letting the Fed get by with mere jawboning.
Fed cuts size of O/N repo ops and plans smaller term OPS
The Fed has announced that they will keep the monthly pace of T-bill reserve management purchases at US$60 billion. However, they will cut the overnight repo operations to $100 billion (was 120 billion previously).
They also announced that they would cut the Tuesday and Thursday term repos to $25 billion from $30 billion previously for February and trim that amount to $20 billion for March.
The Fed has been growing the balance sheet to provide enough liquidity to the system. Some are speculating that liquidity has been plowing into stocks. The announced small trimming has helped to push stocks back into the negative. The NASDAQ index is currently down -2.9 points or -0.3% at 9723. The index was trading around 9739 before the announcement.
Perhaps Powell wants to save some "bullets" in case the coronavirusHiggenbotham wrote: > The Fed has announced that they will keep the monthly pace of
> T-bill reserve management purchases at US$60
> billion. However, they will cut the overnight repo
> operations to $100 billion (was 120 billion previously).
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