The Fed Is Running "QE mini"
OpenAI has “GPT 4o mini”, the Fed has “QE mini”.
What is “QE mini”? QE mini is the Fed boosting bank reserves (temporarily) by way of its Repo facility. Bank reserves are down (first chart), so the Fed believes it necessary to support banks.
You may have heard analysts discussing the Fed’s $29.4 Billion reserve injection on October 31st (the spike in charts 2, 3 and 4)
Charts 2, 3 and 4 show the Fed’s Repo facility at different time intervals (5 years, 1 year and 6 months respectively).
Of note - Fed Repo activity has picked up since September of this year. The Fed has become very active. The Fed knows banks are in a somewhat weak position, especially Bank of America (BAC).
Collectively the banks are sitting on hundreds of billions of dollars in unrealized losses (primarily on the mortgage side in the case of Bank of America).
