IBTK - Fed Tricks Markets With Trillion-Dollar Clandestine Tightening

• Reverse repurchase agreements have exploded to a trillion dollars in money that the Fed is sucking out of the financial system.
• The Fed is effectively being forced by interest rates within the intra-banking system to take as much cash out of bank reserve accounts as it is adding via its purchases of government debt at the other end of the spectrum, thus neutralizing all of its own QE.
• Clearly, the Fed is not engaging in QE due to banks needing more cash in their reserves, or it would not be hosing the money back out of reserves as quickly as it is creating it.
• Another way the Fed is tightening more than it is easing can be seen in the fact that,while it continues its government bond purchases at the same rate, it is backing off of its purchases of mortgage-backed securities.

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