6 replies to this topic

[kinga200]

HI,

 

Been out and cant find why the sudden selloff.

 

Thks

[alexnewbee]

4.5 trln out of Fed balance sheet.

[kinga200]

4.5 trln out of Fed balance sheet.

 

Really? Thks Alex!

[Rogerdodger]

Most Fed policymakers see change to balance sheet policy 'later this year'...

Most Federal Reserve policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up, minutes from their last meeting showed.

The minutes released on Wednesday of the March 14-15 policy discussion, at which the Fed voted 9-1 to raise interest rates, also showed that the rate-setting committee had a broad discussion about whether to phase out or halt reinvestments all at once.

"Provided that the economy continued to perform about as expected, most participants anticipated that gradual increases in the federal funds rate would continue and judged that a change to the Committee's reinvestment policy would likely be appropriate later this year," the Fed said in the minutes.

The Fed bought Treasury and mortgage-backed bonds on an unprecedented scale in the wake of the financial crisis to help keep interest rates low to spur hiring and growth. Fed policymakers have previously indicated that any plan to shrink its portfolio would let the bonds naturally roll off, by

not reinvesting them when they mature, once its interest rate hikes were "well under way."

[kinga200]

Most Fed policymakers see change to balance sheet policy 'later this year'...

Most Federal Reserve policymakers think the central bank should take steps to begin trimming its $4.5 trillion balance sheet later this year as long as the economic data holds up, minutes from their last meeting showed.

The minutes released on Wednesday of the March 14-15 policy discussion, at which the Fed voted 9-1 to raise interest rates, also showed that the rate-setting committee had a broad discussion about whether to phase out or halt reinvestments all at once.

"Provided that the economy continued to perform about as expected, most participants anticipated that gradual increases in the federal funds rate would continue and judged that a change to the Committee's reinvestment policy would likely be appropriate later this year," the Fed said in the minutes.

The Fed bought Treasury and mortgage-backed bonds on an unprecedented scale in the wake of the financial crisis to help keep interest rates low to spur hiring and growth. Fed policymakers have previously indicated that any plan to shrink its portfolio would let the bonds naturally roll off, by

not reinvesting them when they mature, once its interest rate hikes were "well under way."

 

Ok, I see....

 

Thks rd

[MaryAM]

Mortgage backed securities are going to implode. They never had any authority to purchase private debt in the first place, and they have no way to audit the documents backing this debt to determine if the debt is backed by real and not fake documents - like fake warranty deeds and fake mortgage documents where no money has changed hands but documents have been recorded on land records- insured by federal agencies, and sold to the FED with new money - like to the tune of 2 Trillion.. The FED is either corrupt or stupid or a combination of both. Either way - there is no economic model that can predict the outcome of this mess as it is unprecedented in the history of the world,

[Charvo]

I'm bullish treasuries and bearish stocks but I'm long XLP.  However, I'm more on the long side of the treasuries than on the bearish side for stocks.  Usually, April is a good month for stocks, so I'm cautious about bearish trades in stocks.