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of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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Free AccessJ.P.Morgan: It’s All Over Now, QT
Late on Friday J.P.Morgan wrote “given the nascent discussion on slowing and stopping QT in the December FOMC minutes, and new information from Fed leadership in recent days, we re-evaluate our own projections.”
- “We now expect that the FOMC will have the outline of a timeline at the January meeting, communicated mid-February minutes to that meeting. We expect that this plan will be formally agreed to at the mid-March meeting and will be implemented beginning in April.”
- “We look for the monthly cap on the runoff of Treasury securities to be reduced to $30bn/month (down from $60bn/month) and we expect no change in the $35bn/month cap on mortgages.”
- “We think the Fed could be targeting reserves closer to a 10% share of nominal GDP, and we envision QT concluding at the end of November, while ON RRP balances remain large enough to affect smooth functioning of money markets - 0 even while reserves remain somewhat above most estimates of lowest comfortable level of reserves.”
- “If our new forecast comes to fruition, it will result in $420bn in passive runoff of Treasuries from the Fed’s balance sheet in 2024, versus our prior $720bn forecast. Given the longer-term financing outlook, we think Treasury would be loath to deviate from its current path and not make further increases to coupon auction sizes, given increased financing needs in coming years.”
- “We now forecast $2.280tn in net-privately held borrowing needs in 2024, $300bn less than our prior projections, as net issuance of T-bills moderates to $377bn, versus $675bn previously.”
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.