@sama I agree that people sometimes can be delusional in their ways of thinking and AI models MUST NOT reinforce their delusions. If one is relying on the model for any sort of advice there needs to be clear objections from the model to correct delusional paths. Trust is key.
@Jon_S_Desoto_MS "As a conservative, we must vote YES and borrow more money to pay current debt. Lets not worry about what happens after, lets be happy now."
"I promise to not raise your taxes" and "I promise to not cut your benefits" are the two popular political promises that are inconsistent with the much more needed promise "I promise to cut the budget deficit to about 3 percent of GDP" that is required to prevent a big debt/dollar crisis. There is no way that the deficit/debt bomb problem can be sustainably dealt with unless there is a mix of tax revenue increases and spending decreases that are determined in a bipartisan way. Our representatives in Washington, DC, both Republicans and Democrats, know this is true. They understand the need to reduce the deficit by having those from both sides chip in a bit (e.g., a 4 percent increase in tax revenue and a 4 percent spending cut) which would lead to a supply/demand balance improvement for US debt which in turn would lower interest rates. Lower interest rates would help reduce the budget deficit as well as help the markets and the economy. But because politics have become so absolutist, they feel they can't go down this obviously best path because both their constituents and their parties will throw them out of office if they explored this more balanced approach. To me, thatโs a tragedy.
@LadyofCrypto1 CPI YoY is 3.4%
Inflation rate is 2.3%
The FED looks at CPI YoY not Inflation rate.
Get your facts right before asking millions to believe you and make financial decisions.
Diminishing RRPs can signal a shift in monetary policy. If the Fed responds by lowering rates, it may mark a pivot from QT to QE, benefiting risk-on assets. But if the Fed delays, smart money may sell risk assets to raise liquidity, making the decline in RRPs potentially negative
3/ What about QT?
Quantitative tightening involves the Fed selling securities and pulling cash from the market, reducing liquidity. This raises interest rates, prompting institutions to withdraw cash from RRPs for more lucrative lending, eventually draining the RRP.
2/ How does it relate to QE?
During quantitative easing, the Fed buys securities, injecting liquidity into the market and lowering interest rates. With excess cash, financial institutions increasingly use the RRP to park funds.
Reverse Repurchase Agreements (RRPs) are drying up - What does this mean for you? ๐งต
1/ What are RRPs?
RRPs are used by financial institutions to park their excess cash with the FED over night to absorb excess liquidity in the market and keep the interest rates at a base level.