Unpacking The Fed & Treasury’s Master Plan | Weekly Roundup
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Scale is the blockchain that's truly built different. Explore more at scale.space/ecosystem and follow them on x at scale network. Crypto's premier institutional conference is returning to New York on March. We're hosting one of the world's best crypto conferences for institutional and professionals alike. It's gonna be a ton of fun. I'm gonna be there hosting a variety of different panels. I'll be doing a fireside chat with Mohammed El Erian, a different macro panel with Jim Bianco and Joseph Wang. And we're also gonna be doing a live Ford guidance round up there where myself, Tyler, and Quin
Yeah. It's good. We're, we're replacing Tyler with some he better be careful because we, we're gonna get some good guests over the coming week.
Yeah. So, yeah, pretty light week on the economic data side of things, but still lots to talk about. Before we started, hey, Rick, Corey, just saying that, like I don't know. For me, this is some of the most interesting FOMC meeting minutes that I've seen in a long time. Like, there's this, you know, a couple interesting paragraphs there, and then we'll dive into it. But the more I started to reread it and overall, I was like, holy crap. There's, like, a lot of very interesting things packed into, like, this this single paragraph. So
It was it was pretty action packed, I would say. And then combining with, like, last week's very hot inflation data, I mean, that Yeah. Totally. So,
yeah, the big the big stuff is it's all around the the granular monetary plumbing stuff, the the wonky acronyms and all of that fun stuff. But the there's a few just key highlights here I wanted to underline here. So on the top, the stop sentence here of a number of participants also discussed some issues related to the balance sheet. So that's a big theme here. So diving a little bit deeper, the big one that started to make the headlines was regarding the potential for significant swings in reserves over coming months related to debt dealing debt ceiling dynamics. Various participants noted t
Yeah. No. I think and just so the the trolls in our chat is set you think you said million, it's 70,000,000,000 in the RRP. But No. Yeah. So so you don't get any yeah. That but, I think it it's clear, and we've things are very centrally planned. We've been talking about that for a long time. And between Powell and Yellen, it's most obviously the case, and it's continuing to be the case. After after this section, when we get into some of Besson's comments and and the treasury and policy actions, there's some things I wanna talk about on on that coordination front. But, yeah, every I think every
I think the the other big interesting section from this, and you actually tweeted this out yesterday, but just discussing this this, section let me just get my bearings. Many participants expressed the view that it would be appropriate to structure treasury purchases in a way that moved the maturity composition of the Soma portfolio closer to that of the outstanding stock of treasury debt while also minimizing the risk of disruptions to the market. So, really, what that says in plain speak is the they wanna shorten the maturity profile of the Fed balance sheet. They wanna own more bills over m
Yeah. Basically so, yeah, I I had a tweet about it, but the what's going on is is the the percentage of bills that comprise the total US debt right here. This this slide is is 22.4, and then there's the tips and FRNs. So, you know, nonlong duration, just straight notes is, you know, around 30 ish percent, let's say. But just looking at the bill's 22. The Fed themselve
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