Are these people out of their minds?
The Fed has pumped so much fiat liquidity into Wall Street that the place is drowning in cash. Otherwise, how do you explain today’s crazy-ass print on the o/n RRP facility?
For the month just ending, outstandings came in just shy of $1 trillion at $992 billion. And all that cash came from 90 different “counterparties”. That is, from Wall Street firms drowning in cash and preferring to earn 0.05% from the Fed rather than 0.00% in the triparty repo market.
So why in the world do they keep printing $4 billion of new credit each and every day including weekends, holidays and Fed meeting days? Einstein’s quip that the sign of insanity is doing the same thing over and over and expecting a different result is being validated in spades by Powell & Co. And they are naturally getting a lot of attaboys from Wall Street.