FAST FIVE: Former Head Of Plunge Protection Team Says Fed Has To Buy More Debt
Ok, but a conspiracy theory blog (first) and then Goldman Sachs (eventually) predicting a return of POMO/QE does not mean it will happen, right.
but throw in the highly respected former head of the NY Fed's open markets desk (and plunge protection team) predicting that bond purchases are coming, and one can be certain that it's just months, if not weeks, before QE is back (just as we said last week).
In response, the NY Fed announced on Friday that it would offer term repo agreements over the upcoming quarter-end, which would allow financial institutions to borrow cash from the Fed either overnight or for two-week periods, secured by Treasury collateral, and which would provide much-needed funding during the critical quarter end period when bank funding needs tend to surge by hundreds of billions of dollars.
raised concerns about Williams — a widely-respected monetary economist — because of his relative lack of experience with financial markets.
The only question is whether the Fed will ram it through no questions asked, or if – just like 2008 – the Fed will first create an “event” that has Congress begging (on one knee a la Hank Paulson.