The Fed's balance sheet hit its lowest level since June 2021 this week, down over $1 trillion from the peak in April 2022
Annual changes in the Fed's balance sheet since 2002... Source: Charlie Bilello
Heavy Supply remains a risk for US Treasuries
How long will the Fed be able to continue with QT? Source: Michel A.Arouet
Usage of The Fed's emergency funding facility rose to a new record over $109BN...
This week saw the biggest jump in the BTFP since July. Source: Bloomberg, www.zerohedge.com
Fighting the Fed has transformed bond ETFs into cash incinerators..
$TLT has come out of nowhere to hit #3 on the Top 20 Cash Burning ETFs list (lifetime flows minus aum today) with over $10b lost. Top of list used to be -2x/-3x, VIX, commodity ETFs. Now its vanilla bond ETFs... Great table from psarofagis thru Eric Balchunas, Bloomberg
In case you missed it:
Fed Balance sheet has dropped <$8tn for 1st time since Summer 2021 on QT. Fed's total assets are now equal to 29.4% of US's GDP vs ECB's 50.9%, SNB's 111.5%, or BoJ's 125.7%. Source: Bloomberg, HolgerZ
Central banks have continued to load up on the yellow metal
They added 77 tonnes to their gold reserves in August. Net buying is closing in on recent "highs". Gold is trading without much trend, but we are at very big levels. Source: Variant perception, TME
Hedgeye Cartoon of the Day:
Heads will roll...
A big intra-day reversal yesterday...
The SP500 just made a near 100 point reversal in 2 hours, adding +$660 billion in market cap... After jobs report numbers nearly doubled expectations, we saw a sharp move lower Friday morning. Expectations of a more hawkish Fed grew which pressured equities. But later in teh session, markets started buying the news on hopes of downward revisions and adjustments in the numbers... Source: Barchart, The Kobeissi Letter Activate to view larger image,
