11 Comments

Ioer was replaced with iorb

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Yeah, Andreas, I think you have written the term RRP instead of "RP" which is what you really mean. IF the Fed is doing QT, and the market is doing "RP" then those 2 "counter" each other out. IF the Fed is doing QT and the market is doing "RRP" then those two "add synergistically" to even more extreme tightening. Your narrative suggests you mean "RP" where you have written "RRP".

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Beginner question :) Doesn't the Repo account sitting at 2T cancel out with the RRP also at 2T ?

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Does TGA need to continue funding in 2023 due to decrease in receipts? How does this impact?

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If RRP has declined by less than expected, would that not mean that excess reserves have declined more than would be expected, is it not more that the entire balance sheets has not declined by as much as expected due to, for example, MBS not rolling off by as much?

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Nice update. This helps explain why there is more liquidity than is apparent from Fed actions. I think gold in particular has reacted to that lately.

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Thank you. I came to the same result by myself except for the IOER deficit. Thank you again. What differs in my final thought about it is that TGA will get much bigger by year end (700 billions or at least the treasury says so)...I am less optimistic. Given your data on the IOER deficit (12 billions per week), how do you come up to 250-300 bn a year? Do you think this will be enough to offset the TGA?

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