$WLD
๐จ๐จ QT>QE โ Powell sees the Fed balance sheet growing along with the size of the US banking system ๐ข
Bessentโs Fed gain of function critique envisions a normalization of the Fed balance sheet toward pre GFC norms. Before LEHโs demise, Fed holdings of nominal Treasury ex bills were $412 B. Last week it was $3.6 T ๐ค
The Fed balance sheet could be normalized over 5 years through a combination of maturing notes and $30 B per month of QT โฉ๏ธ
The nominated new Fed Chair will be asked about it during his MPR โด๏ธ
๐ฃ Bessent says the US needs a fundamental reset of financial regulation. Treasury says that reset needs to be rooted in a long-term vision for the financial system. Last April, Bessent said that Main Street matters more than Wall Street in bank regulation. Main Street benefits from moderate trend growth ๐
Deleveraging the Fedโs balance sheet frees US interest rates from artificial support. Rates can then help calibrate economic decision making. The administration and the new Chair will delever the Fed ๐
๐ธ Warning ๐ธ I do not provide financial advice ๐The intent of this content is for you to be aware of market conditions before starting to invest ๐Thank you for reading ๐