Liquidity Shock—The Next Leg Of The Donald’s Abominable Budget Deal

The Donald is about to get whacked good and hard by that which he already fears: A final blast of QT, but this time one with no dilutive offsets.

That is, when the Fed drains its final $70 billion of quantitative tightening (QT) from the bond pits in August and September, it’s likely to be matched by another $300 billion cash drain orchestrated by his own Treasury Department.

Treasury Secy Mnuchin has already got some pretty well-worn knee-pads, but when this one hits he’ll surely need transplants.

What we are referring to is the ironic downside of the abominable budget and debt ceiling deal with Congress that Trump was crowing about last night.