Fed Discount Window Weekly Update
This week’s Primary Credit activity at the Fed’s Discount Window:
This week’s primary credit balance was $1.4 billion, flat with $1.4 billion a week ago.
The 10-year yield continues to rise as the Fed lowered the front-end of the yield curve on September 18th. My guess is that Yellen will issue primarily short-term debt when she plugs the $2 Trillion 2024 fiscal deficit later this year. The big mistake Treasury made was not issuing primarily long bonds when rates were at zero percent. A 100-year bond would have been nice. Instead, almost 20% of the United States’ total debt is in T-bills (mature in less than 1 year). Talk about bone-headed.
Meanwhile Powell will launch the next QE program if long yields do not start to come in by March 2025.
