QE Moved Out of On-the-run

There still hasn’t been any official acknowledgement that QE damages effective liquidity by removing usable collateral from the system. By purchasing US Treasury debt securities, including those just auctioned, the Federal Reserve is reducing what is left for the market to repo and, more importantly for fragmented markets, rehypothecate. The closest we have to facing up to the problem is … Continue reading QE Moved Out of On-the-run