rmp
633 views
3 Discussing
Hot
Latest
See original
Tonight's performance by the Federal Reserve is not about interest rate cuts, but whether it will turn on the faucet it holds! The Federal Reserve officially ended quantitative tightening (QT) on December 1. Now, bank reserves have dropped to levels seen during periods of financial stress, with rates even hitting the policy rate ceiling of #SOFR periodically. This indicates that the U.S. banking system is slowly entering a state of liquidity stress!
💸 The real highlight: the balance sheet is set to expand! A 25 basis point rate cut is no longer the main attraction. The most important signal from the Federal Reserve will be the direction of its balance sheet strategy.
The Federal Reserve is expected to clearly outline how it will transition to a reserve management purchasing program. This essentially means easing liquidity in a disguised manner.
#EvercoreISI predicts that this program could start as early as January 2026. It is expected to inject about $35 billion per month for the purchase of treasury bills, resulting in an annual growth of the balance sheet exceeding $400 billion.
U.S. banks predict that the Federal Reserve will announce a reserve management bond-buying program of about $45 billion per month at the end of this week’s meeting.
⚙️ Why must liquidity be injected? Federal Reserve Governor Waller stated that this move is crucial for maintaining order in the repurchase market and ensuring smooth transmission of Federal Reserve monetary policy. In simple terms, without liquidity injection, the system will jam!
From my personal perspective, liquidity injection is a hard necessity, the banking system is already short on liquidity, and the Federal Reserve's balance sheet expansion is not a matter of choice but a requirement! Whether it's $35 billion or $45 billion, the shift in liquidity has become a foregone conclusion. What to watch tonight? Don't just focus on interest rate cuts; pay close attention to the description of the start time and monthly scale of the #RMP plan in the implementation statement. This is the key signal determining whether $BTC can break through the $96,000 barrier.
💸 The real highlight: the balance sheet is set to expand! A 25 basis point rate cut is no longer the main attraction. The most important signal from the Federal Reserve will be the direction of its balance sheet strategy.
The Federal Reserve is expected to clearly outline how it will transition to a reserve management purchasing program. This essentially means easing liquidity in a disguised manner.
#EvercoreISI predicts that this program could start as early as January 2026. It is expected to inject about $35 billion per month for the purchase of treasury bills, resulting in an annual growth of the balance sheet exceeding $400 billion.
U.S. banks predict that the Federal Reserve will announce a reserve management bond-buying program of about $45 billion per month at the end of this week’s meeting.
⚙️ Why must liquidity be injected? Federal Reserve Governor Waller stated that this move is crucial for maintaining order in the repurchase market and ensuring smooth transmission of Federal Reserve monetary policy. In simple terms, without liquidity injection, the system will jam!
From my personal perspective, liquidity injection is a hard necessity, the banking system is already short on liquidity, and the Federal Reserve's balance sheet expansion is not a matter of choice but a requirement! Whether it's $35 billion or $45 billion, the shift in liquidity has become a foregone conclusion. What to watch tonight? Don't just focus on interest rate cuts; pay close attention to the description of the start time and monthly scale of the #RMP plan in the implementation statement. This is the key signal determining whether $BTC can break through the $96,000 barrier.
See original
RMP + eSLR: The Federal Reserve is quietly 'thickening the pipelines' for the high-debt era
#RMP #eSLR
In recent days, the macro market has been discussing two things:
Monthly reserve management purchases (RMP) of around 15 to 45 billion dollars;
New regulations on eSLR (Enhanced Leverage Ratio) coming into effect from 2026.
The Federal Reserve and regulatory agencies are using 'balance sheet + regulation' to provide greater 'pipelines' for U.S. Treasury and banking systems, enabling this high-debt era to operate a bit longer and more steadily.
First, let’s clarify the background: What is the Federal Reserve doing?
1.1 What are QT and QE?
In recent days, the macro market has been discussing two things:
Monthly reserve management purchases (RMP) of around 15 to 45 billion dollars;
New regulations on eSLR (Enhanced Leverage Ratio) coming into effect from 2026.
The Federal Reserve and regulatory agencies are using 'balance sheet + regulation' to provide greater 'pipelines' for U.S. Treasury and banking systems, enabling this high-debt era to operate a bit longer and more steadily.
First, let’s clarify the background: What is the Federal Reserve doing?
1.1 What are QT and QE?
Login to explore more contents