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Macro Monday 61 - Fed Balance Sheet Signals Liquidity BounceMacro Monday 61 Fed Balance Sheet Hits Long Term Supporting Trend Line The Federal Reserve Balance Sheet The balance sheet is published weekly, typically on Thursday afternoons, and it provides valuable information on the direction of global liquidity and the fed’s monetary policy. When the Federal Reserve’s balance sheet increases, it means that the central bank is acquiring more assets. This expansion can occur through purchases of Treasury securities, mortgage-backed securities, or other financial instruments. The increase in assets typically leads to greater liquidity in the financial system and can influence interest rates. Conversely, a decrease in the balance sheet indicates asset sales and reduced liquidity The Chart - FRED:WALCL ▫️ Since April 2022 the Federal Reserve Balance Sheet has reduced from $8.973 trillion to $7.140 trillion (reduction of $1.833 Trillion). ▫️ Right now, the chart has signaled that we have hit a critical diagonal trend line support (red line on chart). ▫️ We have hit this red trend line twice in the past (Sept 2019 & Aug 2008) and on both occasions it bounced from the red trend line and the balance sheet thereafter increased significantly for 2 to 5 years. If you follow me on Trading view, you can revisit this chart at any time and press play to get the up to date data and see if we have held the line or fallen below it. What does the following mean to you? ✅High likelihood of interest rate reductions in Sept. ✅Apparent stabilization of the rate of inflation (U.S) ✅A current stable labor market in the U.S ⏳The possibility of the balance sheet bouncing from trend support and increasing from the support line as it did in the past for 2 years+ (Increasing Global Liquidity). Versus 🚨 The yield curve un-inverting (moving above 0) 🚨 Sahm Rule Triggered 🚨 The marginal increase in the U.S. Unemployment Rate which is consistent with prior recessions. 🚨 U.S. Initial Jobless Claims and Continuous Jobless claims have had increases consistent with pre recession historic activity. 🚨Job openings reducing since March 2022 from approx. 12m to 9m (this would be the largest pre recession drop ever if followed by a recession. 🚨 Warren Buffet sitting on the biggest pile of cash ever. Does this all say “soft landing” imminent or should we be worried? In my opinion, we will know by Jan 2026. Its a big window of time, but the timing is the biggest challenge, and if we can take one thing from the above, volatility is guaranteed. Happy Trading PUKA
FRED:WALCLLong
by PukaCharts
2
Central bank liquidity is a pretty good indicator for SPXWatching a pullback take place in central bank liquidity usually correlates with retracements in SPX (albeit sometimes lagging). If it explodes higher, that could possibly mean two things, we're in the actual QE stage (we're not there yet despite what many others claim) and that would suppose the actual crisis has started. I would expect the move to be down first in such scenario, even with central banks propping up the market with liquidity.
FRED:WALCL
by EdwinPus
2
The Fed's Pivot - What to Expect in the Months Ahead In this video, I explain what to expect in the months ahead, following the Fed's pivot back to monetary easing. Also, I wanted to make several notes: When I said that it's almost never better to own derivatives than holding an asset outright, I do realize the importance that derivatives can play with leverage and risk management. When I said that fear is always highest at the +2 standard deviation of the log-linear regression channel, this was confusing because typically fear is highest when price reaches the -2 standard deviation. In this particular ratio chart, fear over the Grayscale Bitcoin Trust was highest when Bitcoin outperformed it enough for the BTC/GBTC ratio to reach the +2 standard deviation. When I said that the log-linear regression channel is one of the best indicators, I do realize that compared to other statistical methods, this indicator is quite rudimentary. Nonetheless, I find it to be quite useful. I apologize for the poor audio, this seems to be a matter of how TradingView is uploading my audio. On my end, my audio is very clear. Important Disclaimer Nothing in this post should be considered financial advice. Trading and investing always involve risks and one should carefully review all such risks before making a trade or investment decision. Do not buy or sell any security based on anything in this post. Please consult with a financial advisor before making any financial decisions. This post is for educational purposes only.
FRED:WALCL
by SpyMasterTrades
38
Worthless Dollar by 2050?Suppose you wanted to ask the question, hypothetical of course: What percentage of the economy does the FED balance sheet comprise of? If you were to replace "the economy" with "M2", then you could get something easily measurable. Simply use the symbol: FRED:WALCL/1000/FRED:WM2NS One is measured in billions, the other millions, so we divide by 1000 (I say just switch to trillions and stick with it, but so much for standards). IF this trend continues at the current pace, the FED balance sheet will make up 100% of the economy by about 2050. The dollar will probably be worthless by then, as the only thing that fuels debt monetization currently seems to be a continuously decreasing proportion of honestly earned, productive dollars, and an increasing proportion of dishonest dollars supporting a bankrupt institution of commercial and federal finance. By using productive money as a means to price in something which should be bankrupt (this is happening now), this bankruptcy will eventually flow and be fully priced into the economy and the proportion of people who believe in the dollar simply stop using the dollar or go bankrupt via the dollar. The balance sheet consists of mostly (see more: www.federalreserve.gov): 5.7T Treasury bills, notes, bonds. Who else could buy that many of them? Nobody I know. 2.7T Mortgage backed securities. They own more mortgages than anyone. Unfortunately the data only goes back to 2012 on TV, not sure why. The FRED WALCL data actually goes back to 2002, so I filled the data in as best as I could using the data from FRED using some red lines. Pretty crude, but probably good enough (should we even trust the data?). I hope you enjoyed this simple idea and many thanks for reading. Don't forget to hedge your bets :)
BITSTAMP:BTCUSDLong
by fringe_chartist
Short-term bullish?Everything is said on the chart I will take profits along what I believe is the last run before a bear market, I still believe there are many positive factors that will positively affect FTM and the crypto market in the short term. Also; whales have accumulated "According to WhaleStats, Fantom (FTM) has been among the top ten tokens purchased by the top 100 ETH wallets this week." dailyhodl.com The price might have simply been acting strange recently with those Fork Ponzi farming protocols Graph of S&P500, Federal Quantitative Tightening (QT), and BTCUSD It is imperative to know the importance of macroeconomics and such policy. If QT is high, which will most likely be the case due to extreme money printing miro.medium.com
Long
by ssavi