New York Fed Completes $540 Million Reverse Repo Even As It Proceeds With QE Lite

The Fed continues to send schizophrenic signals, as one day after announcing it will be purchasing hundreds of billions of bonds it completes yet another half a billion liquidity extracting tri-party repo. This time the Fed used all three core types of collateral: USTs, MBS and Agencies, transacting in $180 million of each, paying an average stop out rate of just over 0.2%. We just wonder who the Fed is trying to fool with these "tests" - it is more than obvious that the Fed will never tighten again, or at least not until the next regime takes hold... some time after the debt repudiation event.


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