We are in the wake of The Fed flood. And its not a half-step, but a flown-blown boogie.
The Fed sold a record $756 billion in Treasury securities this morning in exchange for cash via overnight “reverse repos.” This was up by a stunning 45% from yesterday’s operations of $521 billion. There were 68 counterparties involved. Yesterday’s overnight reverse repos had matured and unwound this morning, to be more than replaced by today’s Fed Flood. The result? The Fed’s balance sheet tops $8 trillion!
This is truly The Wake of the Fed Flood!