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Jeff Gundlach’s ‘QE-Lite’ Call, And Why The Fed May Announce Outright Asset Purchases On Wednesday

"They are baby-stepping their way to doing QE".

"They are baby-stepping their way to doing QE".
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2 comments on “Jeff Gundlach’s ‘QE-Lite’ Call, And Why The Fed May Announce Outright Asset Purchases On Wednesday

  1. Ballooning Treasury supply will make matters worse. The Congressional Budget Office this week estimated the fiscal 2020 deficit will exceed $1 trillion, two years earlier than previously estimated. The $433 billion borrowing estimate for July through September, made last month, is more than double the initial estimate made in April.

    The repo rate for general collateral, which has averaged about 2.20% since the Fed cut the fed funds target range to 2%-2.25% on July 31, could initially exceed the top of the range by 10 basis points to 15 basis points, Pozsar said, at which point “it’ll drag everything else with it, including the fed funds rate.”

    Pozsar says things could start to get ugly as soon as early October, when investors start scrambling to secure funding for year-end.

    “You have a massive supply shock made worse by the inversion, and dealer inventories are the bogey man,” Pozsar said. “Things are going to get bad before year-end.”

    https://advisorhub.com/bond-plumbing-may-be-what-spurs-fed-cuts-rather-than-economy/

  2. It was apparent even to an amateur like me that IOER issues were going to emerge a couple of days earlier but that chart group above explains exactly what I could not articulate. That’s where working in that business can really help..You guys have seen all this before. Thanks …great post….helps a lot

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