Here's the "No BS" macro news for today. -The Fed projected, back in early 2024, that they would likely end balance sheet reduction around this time and transition toward gradually increasing their balance sheet in line with nominal GDP (so that banks' fractional reserve lending remains unaffected with current regulations). -It got pulled forward slightly, perhaps two or three months, by the government shutdown overfilling the Treasury cash account (i.e. sucking cash out of the broader financial system). -The Fed previously announced they would stop reducing their balance sheet. Today they said they would start gradually increasing it. Powell said the baseline is $20-$25 billion per month, but due to current liquidity shortages and April tax day (which drains liquidity), they plan to increase it by $40 billion per month through April (which afterward in May, conveniently, is when Powell will be replaced as chairman with a presumably more dovish chairman). -They're focusing on printing money to buy short-term duration Treasuries, not long-term. This is for the financial system, not economic stimulus per se, and so they won't be calling it QE. -The Fed will now be structurally expanding their balance sheet while inflation is above their own target. -This is a gradual print scenario. It's bullish for liquidity and liquidity-correlated assets, in general. It's not explosively bullish, but it does lean dovish. -Nothing stops this train.

Replies (77)

Dabby's avatar
Dabby 3 weeks ago
Thanks Lyn. Also should be noted that the Treasury is buying Treasuries on a weekly basis. Most recent purchase was $14B. Nearly 70% of bonds issued in US over last 12 months appear to have been Treasuries. The Fed and Treasury are now the buyers of last resort for T's and they control the bond market. Total fugazi. Seems like nothing is stopping this train until its full derailment
Benking's avatar
Benking 3 weeks ago
Go up, go down, one thing can't change: no more than 21 million Bitcoins will be mined 😎🧡
frphank's avatar
frphank 3 weeks ago
Trump can do what others can't.
21 million supply Same Rules for everyone Anybody with a smart phone or internet 🛜 connection can receive, hold and/or send bitcoin Tic Tock next freak’n block
Zach Lanting's avatar
Zach Lanting 3 weeks ago
I'm convinced the Fed reads Lyns premium reports then makes decisions based off of it since she's already done all the work for them.
It's 'reserve management purchases.' QE would target the long end of the curve. They'll probably do that soon enough when yields go up despite policy rate coming down.
Toby McMann's avatar
Toby McMann 3 weeks ago
Lyn, appreciate you choosing macro content for Nostr.
"Liquidity management" is the polite euphemism for monetization. It's fascinating how they’ve decoupled the act of printing from the definition of QE. The mandate has quietly shifted from 'stable prices' to 'stable collateral'.
I can almost here the printer warming, a gentle brrrr-ing, the rumble of a distant train. Choo choo, a lonesome whistle howling in the night
hasky's avatar
hasky 3 weeks ago
Nothing stop this train , abolished the fed
We had an entire Bitcoin bull run into QT. I see it as mostly ETF driven, no surprise the shitcoin complex didn’t join in. Anyway, people turning bearish here are weird to me - distinctly remember 4y ago this time saying “Fed is about to start QT, can’t see this going much further”. We going up
Keep purchasing more XRP and start moving your assets to a more decentralized wallet, If you still have them on exchanges, ledgers and cold wallet you will lose them over there, take now!!
What, is Michael Caine the next FED Chairman?🤣 . "You wozj only supposed to lower inflation!"
Almost finished reading @Lawrence Lepard new book The Big Print. Excellent history of money printing - which Larry refers to as "mouse click money" Great book Larry - deep gratitude for sharing your personal journey of so many economic booms and busts even back through your family's history. A book you were born to write and a legacy that has you fighting for sound money long before Bitcion. Gratitude for finally being able to sort of understand a @Lyn Alden macro post 😂. @walker awesome voice over work. I buy my books on audible (homeschooling solo mompreneur here - audio is my go to). Your voice is great and ur changes in tone/accent when Larry quotes famous figures, is awesome! It adds to the fun of the book. great team Bitcoin production! View quoted note →
You don't need any of those things to receive. Just a number you can generate yourself on paper. Sending though, yea, you at least need to be able to connect with a node.
Never..? I am not American either. The question is, why you don't ask if it's even more unamerican to destroy the purchasing power of your population (the American people) because you want to bailout the system you and your friend are benefiting from (meaning bankster, burocrats, politicians etc etc). Why isn't unamerican to destroy the tool your people use to save their energy, power, time and property?
It would be… ? Not sure how that excuses attacking the guy still showing up at 70 cautioning about lowering rates while the president calls him a loser, despite how much that boosts your book sales
I am sure the 70 guy is making the best for the people, as the president.. lol It's theatre, neither of them looking for people's interests. The solution isn't lowering rates, raising rates, keep them steady. The problem is them itself, both sides, and the ones choosing one of the two. Opt out.
That’s not what the votes show. Powell has been the most hawkish president since Volker
And also lets not forget that in September your ‘macroeconomist’ said bitcoin would be flat at 120k
And so? You think I do my stack and buys based on someone price prediction? Again, what are you talking about..? Started with an argument, using Trump, now Lyn's price predictions, shielding Powell's action like it's your child? I really don't get what is the main point of all of this.. again you started arguing under a meme, and talking about "antiamerican".. 1) What
It’s a survey of publicly available prices. If you don’t wanna believe it that’s fine but not based on evidence, just conspiracy theory. You’re saying that the fed is somehow the enemy of the people since it can’t control inflation, so people should buy an asset that has fallen 30% in a few months… to avoid losing purchasing power that has lost less than 1% in that time due in a large part to powell keeping rates above cpi….
Who sayd FED can control inflation??!! FED can try to control only SOFR, Secured Overnight Funds Rate.. INFLATION you talking about (price raises) is a completely different thing, and comes from market, from supply and demand, and many other different factors, and you have monetary inflation, price inflation and so on, so CPI, counts just a basket of things, that constantly changes in order to fit the narrative. The items in the basket change constantly. Monetary inflation is an average of 8% per year. I am saying the FED and the Government spending is the problem.
My main point is that you’re a moron that has to continually tell everyone that usd collapse would be good for americans, that american institutions hate their people, inflation is 8% despite every source saying that isn’t possible or his entire worldview collapses. And you have to support charlatans like Lyn who give you convincing alternatives while cashing in on your hope (in fiat)
How? De pegging usd from gold resulted in the longest pp boom for average Americans in history and it is still the reserve currency 50 years later