EMERGENCY FED. But don't call it QE (but then what is QE?)

The short-term problems that the Fed faced in terms of "liquidity" are known. But as I wrote in the past, the same FED said the operation was temporary and could not be seen as a Quantitative Easing (QE). Remember? The Federal Reserve was forced to intervene by announcing a series of operations known as "repurchase agreements " to inject a mountain of USD into the financial system to alleviate temporary market tensions. But you didn't have to worry: it was a technical and temporary matter. Too bad that then things have not become neither temporary nor technical, given that the excuse of the "end-of-month deadlines" seems to me quite exhausted.
So let's see what the NYC Fed tells us about the topic.

(…) The Desk has released an update to the schedule of repurchase agreement (repo) operations for the current monthly period. Consistent with the most recent FOMC directive, to ensure that the market remains ample even during periods of sharp increases in non-reserves repo operations will increase to at least $ 120 billion starting Thursday, October 24, 2019. (…) (Source).

You read that right. Other than temporary and limited. We move from today to 120 billion of USD, against the 75 billion of emergency days of September.
But look at this chart. On the one hand the Overnight rate that must be tamed by the FED and on the other the impact of the purchase transactions.

REPO & OVERNIGHT USA

Even by eye, we see that something is getting out of hand. They don't really tell us everything, that's clear … The FED is acting abnormally: but let's not call it QE, please …

STAY TUNED!

–

Danilo DT

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