Bernanke Central Planning LLC's First Faux Pas - Contrary To Prior Disclosure, Fed Announces Will Also Purchase 30 Year Bonds
Will someone who read the official Fed statement yesterday, please indicate where it said Liberty 33 would purchase 30 Year bonds? We will spare you the trouble - it was mentioned exactly nowhere. Which is why it comes as a major surprise (and a major loss of P&L to traders who have the misfortune of trading rates), that in the just released schedule by the New York Fed, the Fed has announced it would also purchase 2040 maturities on August 26 and 30 - yes, that would be the very long end. Gotta love the great coordinate and communication between the various branches of the Fed. And yes, this is what happens when you have central planning.
Full text from New York Fed, as it embarks on purchasing $18 billion in bonds over the next month.
Across all operations in the schedule listed
below, the Desk plans to purchase approximately $18 billion. This is
the amount of principal payments from agency debt and agency MBS
expected to be received between mid-August and mid-September, adjusted
for prior SOMA agency MBS purchases that have been allocated since