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Here Is The Real Reason The Fed Restarted QE

• https://www.zerohedge.com, Tyler Durden

It is this same "not QE" that has boosted the Fed's balance sheet by $200BN in one month, the fastest rate of increase since the financial crisis.

Yet while the Fed's desire to purchase Bills instead of coupon Treasuries was dictated by its superficial desire to distinguish the current "Not QE" from previous "True QEs", even though both tends to inject the same amount of liquidity into the system, which as a reminder is what the Fed's bailout role in the past 11 years has all been about, and only true Fed sycophants are unable to call a spade a spade, the Fed's choice raises a rather thorny question of where the Fed will source those T-bills, because as JPMorgan calculates, the net supply of Bills in 4Q19 and 1Q20 is around $115-$130bn while JPM's economists estimate that at least $200-$250bn of purchases could be required to return reserves to around $1.5tr where they were in early September this year.


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