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Fade the Jobs Number 3/10/23


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https://www.forexlive.com/centralbank/us-official-says-banks-not-being-bailed-out-nah-theyre-being-bailed-out-heres-how-20230312/
 

„OK, now this new Bank Term Funding Program (BTFP), as noted above .... means holdings of long-dated Treasuries or MBS with mark-to-market losses can unlock liquidity based on the original value.

I've seen estimates put the hole at 600bn USD, not the 300bn USD noted above. But, no matter! The Fed program accepts collateral at par, so all those unrealised losses on held-to-maturity Treasury and MBS securities portfolios ... not a problem. That is, bailout in all but name. 

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For monetary policy, now that this is the case, it means the Federal Open Market Committee (FOMC) can proceed full steam ahead on rate hikes.“

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The Fed has not been "hiking rates." 

I don't see how this new program is any different from regular discount window loans. They just change the name and make believe to make the market think that it is doing something special. 

If banks use this program instead of interbank repo, that will add liquidity to the system and rates should at least go flat. 

 

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