MBCC TH 4th December'23 - "Is the Fed cheating and adding stealth QE in the back? Well, short term, but it is all about RRR drain..."

November was a strong month or the S&P 500, and want to know why? The Fed is cheating! They are buying time before the inevitable. In July their treasury issuance was massive and that killed the Bond markets as yields spiked. They realised that they were breaking the system as they had no choice given US federal deficit, they need to keep issuing more and more debt! So in November, Yellen announced cheekily a muss less heavy issuance of Bonds and MORE into Tbills, so more short duration and back end. This relieved pressure on the long term bonds that rallied super hard, as we had said to our readers we went long TLT 0.00%↑ back in October when 10 year yields spiked to 5%!

Where do we stand today and what is going on..end of the day it is ALL about liquidity!