Tag: Federal Reserve

Why is the Fed's SRF failing? Top Fed officials called the issue a "leaky ceiling" that doomed Quantitative Tightening (QT). Learn how low bank participation and the leaky floor analogy suggest new policy changes.

Analysts are expecting the Federal Reserve to announce the end of quantitative tightening (QT) at the upcoming meeting this week. The speculation is fueled by Chairman Jerome Powell's speech earlier this month in which he mentioned the supply of reserves may reach an "ample" level "in coming months."

Quantitative tightening (QT) may reach its end point "in the coming months," said Federal Reserve Chairman Jerome Powell in a speech last week. What does it mean? Will QT finish before Powell's chairman term ends?

The Federal Reserve is expected to cut its benchmark interest rate by 25 basis points this week. This has been the baseline market assumption since Chairman Jerome Powell's speech at Jackson Hole, in which he proclaimed, “the shifting balance of risks may warrant adjusting our policy stance." The question is, how many dissenting votes will Powell face in this meeting?

The Bank of England on Thursday released its latest Monetary Policy Report, announcing its decision to lower its policy rate by 25 bps to 4%. The report contains a lot of excellent analysis, including on the recent rise in food prices, the effect of trade war as well as a review of its quantitative tightening policy. But one thing, a comparatively much less important thing, in the review just stuck in my mind...

Standing Repo Facility (SRF) is a relatively young Federal Reserve facility. Formally established as a permanent tool in July 2021, SRF allows banks to obtain overnight liquidity with high-quality collaterals like Treasuries through a repurchase agreement. Most people may not be familiar with this "obscure" Fed tool, but it is possible that SRF will soon become one of the Fed's most important tools.

Trump-appointed Fed governors will hold a board majority by the time Powell steps down as a governor. And that could matter a lot.

President Trump's plan to install a "Shadow Chair" months before Jerome Powell's term ends will definitely reshape US monetary policy — but it could face a surprising challenge from Powell himself.

Quantitative tightening (QT)—a process central banks use to reverse years of liquidity creation from quantitative easing (QE)—is concluding in many advanced economies. The central banks are growing confident that reserve levels in their financial systems are nearing their endpoints. Where are the endpoints of QT and what come next?

The Fed is currently in a "wait and see" mode in deciding what is the reaction to Trump's trade policy. But is it possible for the Fed to be a bit more proactive than merely saying "we will be able to update you further when we know more details"? Enters scenario analysis.