Fed balance sheet

The Fed balance sheet and repo facility cannot explain the stock market’s movement in isolation

Repo Facility: QE Or Not? It Does Not Matter

Unigestión | Whether it is called QE or not, buying bills (swapping reserves for short-term bonds), injecting liquidity into the market place and growing the balance sheet affects risky assets. Market conditioning (the Pavlovian effect) since the GFC is that stock markets cannot go down when the Fed is growing the balance sheet. Additionally, the Fed’s extremely aggressive response to the repo blowout in September is another signal to markets that it has a very low tolerance for market fluctuations.

Jerome Powell may let inflation drift a little higher

Jerome Powell, A “Low-Interest-Rate Guy”

US President Donald Trump eventually nominated Federal Reserve Governor Jerome Powell as next chairman of the Federal Reserve. Governor Powell has never dissented from the policy actions of the FOMC during his five years as a voting member. However, it remains to be seen how he will make his own mark on the US central bank.