Different presidents. Different parties. Same direction.
More money printing. More debt. Higher prices. Source: Charlie Bilello
Is the US quietly moving toward QE and Yield Curve Control—without calling it either?
Here’s the mechanism: 1️⃣ The Treasury issues more short-term T-bills. 2️⃣ The Fed buys bills, injecting liquidity into the system. 3️⃣ The Treasury uses its cash and buyback program to retire longer-dated Treasuries. The result? 👉 More demand at the long end. 👉 Less duration risk in the market. 👉 Potential downward pressure on long-term yields. Technically, this isn't traditional QE because the Fed isn't directly buying 10Y or 30Y Treasuries. But economically, the distinction could become increasingly blurred. With US interest costs exploding and long-term yields above 5%, policymakers have a powerful incentive to prevent the long end from spiraling higher. Call it buybacks. Call it liquidity management. Call it maturity transformation. But if the objective increasingly becomes controlling long-term borrowing costs… We may eventually get Yield Curve Control—just with a different name tag Source: Lukas Ekwueme @ekwufinance Hoisington Investment Management
The total U.S. government debt reached $40.05 trillion as of Monday, according to the Treasury Department.
Treasury reported a $432.3 billion deficit in July, reaching its highest monthly level in more than five years. A decade ago, the national debt level was $19.4 trillion. Washington’s solution to every problem remains the same: Borrow more. Spend more. There is no fiscal discipline in sight. Source: Charlie Bilello CNBC
At least we know the direction...
Source. zerohedge
The three largest foreign holders of US Treasuries all reduced their exposure in June.
🇯🇵 Japan: sold $26B, cutting holdings from $1.143T to $1.117T. 🇨🇳 China: sold another $26B, bringing its Treasury holdings down to just $633B — the lowest level since September 2008. 🇬🇧 UK: holdings declined by $9B to $940B. But the bigger story may be the collapse in foreign demand. 📉 Total foreign holdings of US Treasury bonds and notes increased by just $6.8B in June, compared with $56.6B in May. At a time when Washington needs to finance enormous deficits, its biggest foreign creditors are becoming increasingly reluctant buyers. More supply. Less foreign demand. Higher yields? 👀 Source: Bull Theory
Donald Trump's net approval rating remains close to record low ahead of midterms
Nate Silver thru Christophe Barraud
The Fed is buying US Treasury bills (i.e short dated US government bonds) at a faster pace than during Covid.
- Covid: ~$320B - Last 7 months: ~$290B In just 7 months, the Fed has already bought almost as many Treasury bills as it did during Covid. In other words, the Fed is printing money to buy UST bills, thereby suppressing yields... How long until they will implement YCC? Source: Lukas Ekwueme
Just 8% of U.S. consumers expect their income to outpace inflation next year.
Source: Hedgeye Bloomberg
