OWELL: THE FED WILL MAINTAIN HIGH BOND PURCHASE LEVELS FOR "A FEW MONTHS" – THE MARKET AWAITS A "REAL QE"
Fed Chair Jerome Powell announced:
The Fed will buy $40 billion in Treasury bonds over the next 30 days
This activity comes just 12 days after QT ends
And the purchase level may remain high for "a few months"
Although the Fed insists this is not QE, the market still sees it as a pivot to soft liquidity, especially in the context of:
Rising employment risks
Cooling economy
Inflation not yet at target
However, unlike the COVID-19 period when QE pushed system-wide liquidity to record levels, the Fed is still very cautious to avoid repeating the mistakes of 2020–2021.
Market sentiment at this time is very clear:
The Fed is opening the faucet, but not strong enough to create a breakthrough like "COVID-era QE" — something many investors are quietly hoping for to... reach the shore.
Meanwhile, risky assets are still reacting slowly, waiting for clearer policy signals in upcoming inflation – employment data.
