Daily Archives: July 29, 2012

What Is the US Treasury Up To?

In our weekly look at the Fed’s balance sheet, Tracking the Fed Balance Sheet, we noticed what we thought was anomalous behavior in the Treasury and the depository institutions’ reserve accounts. We believe we can show something is going on although the details of the implied transactions remain to be discovered. In short, the Treasury is borrowing money on a daily basis from the reserves that depository institutions have on deposit with the Fed. Our argument follows.

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