- This topic has 2 replies, 2 voices, and was last updated 1 day, 7 hours ago by
BigBalls.
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December 11, 2025 at 3:34 am #6422
BigBalls
ParticipantWell, we got our 25bps rate cut. It was telegraphed and welcome as evidenced by stocks popping.
But the big news is the announcement that the Fed will begin buying $40billion in T bills starting December 12. The Fed is buying $40 b in T bills and putting them on its balance sheet. Why the fawk would they do that while inflation is still sticky in the economy? This might get really fun with stocks. The Fed is making this move to stimulate the struggling economy. I mean, we are being provided zero economic reports but I think we can see why. No reports, no data, just lies. Buying the T bills will lower borrowing rates as it will inject $40b into the economy.
Liquidity problems will be solved, mortgage rates will drop. In other words, the money printing machine is back in use. Stealth QE.
I’m feeling bullish about stocks guys. -
December 11, 2025 at 4:44 pm #6446
RWC
ParticipantIt’s crazy. Bank reserves peaked at $4.27 trillion in 2021 and, have recently fallen as low as $2.83 trillion.
These so called reserve management purchases (RMP) would not be your normal quantitative easing where the central banks purchase government bonds to longer dated yields and stimulate lending. Usually you see that in an economy where deflation is a greater threat than inflation and rates are at or near zero.
Which to your point WTF are they doing this with inflation still sticky in the economy?
The RMP operation doesn’t meet any of these criteria. It would be designed to manage money market liquidity, ensuring the plumbing of the interbank market doesn’t suddenly clog up and screw the functioning of the financial system. Now the Fed leaves itself open to accusations from the critics regardless of what they name it, that this latest wave of money printing madness could possibly accelerate towards higher inflation and currency debasement.
If you take this latest $40 some billion haul of T bills on top of the MBS reinvestments, the Fed will be buying around $60 billion of bills a month. This will keep reserves ample but how low can reserves go before triggering a liquidity crisis and a spike in borrowing costs. If nominal GDP is around 3.5% bank reserves would need to increase at that rate, meaning the Fed will have to continue pumping money into the system.
Beats the hell out of me BB so in the meantime I’ll continue to go with your market call it’s been good. This morning at the open, I took a big position in Oracle on weakness.
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December 11, 2025 at 5:05 pm #6449Participant
Excellent post, better written than mine but along a similar vein. You are right on, this is not traditional QE which is why I called it “stealth QE”.With the current blackout in economic reports ( yeah sure it’s the shutdown that is preventing the reports, lmao) this move seems out of line with the Fed’s previous policy of tightening. Mortgage rates immediately repriced lower yesterday by 25 bps. They dropped another 1/8th this morning.
Stock market loved it, nice jump today. Except my stocks which are red, wtf. I’m not going to pretend I know where things are headed but I’m feeling bullish on stocks. Corporate tax breaks, lower borrowing rates, a White House that caters to big business, all seem to indicate a strong support for Wall Street. Let’s go!
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