Audio is streamed directly from the publisher (traffic.libsyn.com) as published in their RSS feed. Play Podcasts does not host this file. Rights-holders can request removal through the copyright & takedown page.
Show Notes
The Fed is paying out more in interest than it is taking in, resulting in an IOU to the US Treasury. Is this a big deal? Did the Fed believe this was possible? Understand why you may see in the news the Federal Reserve is running a deficit. Plus, is the Treasury about to do bond buybacks to increase liquidity in markets?
What is a Federal Reserve deferred asset liability
How much of a deficit is the Fed running?
Why is the Fed paying out more in liabilities than its receiving in interest?
Why are Janet Yellen and the Treasury thinking about doing bond buybacks?
What does it mean when bond markets are illiquid?
What is the average interest rate on outstanding US Treasuries?
Can the Federal Reserve go bankrupt?
What role to Fed Overnight Reverse Repos have in this?
How does the fed pay interest out to banks through excess reserves?
Reviewing 2013 Fed paper on potential for deferred assets (liability) to arise
Mentioned in this Episode:
Financial Times article on treasury bond liquidity https://www.ft.com/content/bc7271f9-a0aa-4643-bed3-40d2d5ec80d1
Brookings article on Fed running a deficit and owing the Treasury https://www.brookings.edu/blog/up-front/2022/06/01/what-if-the-federal-reserve-books-losses-because-of-its-quantitative-easing/amp/
Average interest rates on US Treasury bonds, bills, notes https://fiscaldata.treasury.gov/datasets/average-interest-rates-treasury-securities/average-interest-rates-on-u-s-treasury-securities
NY Fed list of current SOMA Fed holdings https://www.newyorkfed.org/markets/soma-holdings
Fed Overnight Reverse Repo outstanding https://fred.stlouisfed.org/series/RRPONTSYD
What are Overnight Reverse Repos https://podcasts.apple.com/us/podcast/what-are-reverse-repos-and-repos-fed-enters-overnight/id1432836154?i=1000523659106
Fed earnings remittances due to the U.S. Treasury https://fred.stlouisfed.org/series/RESPPLLOPNWW#0
Derek Moore's book Broken Pie Chart https://www.amazon.com/Broken-Pie-Chart-Investment-Portfolio/dp/1787435547/ref=sr_1_1?keywords=broken+pie+chart&qid=1558722226&s=books&sr=1-1-catcorr
Contact Derek [email protected]