Bill Pass

First permanent injection of funds in 10 months.  A bill pass.  Now, it qualifies as permanent, but the $10 billion injection will only last 2-3 months.  Not very permanent to me.

The Fed is doing all it can to cram liquidity into the short end of the market.  They have expanded the TAF to $100 billion, and might go beyond that.

I suspect that these measures can succeed in bring the TED spread down for now, but unless they make the TAF permanent, there will be an effect when they unwind it.   What these measures can’t do is unjam our mortgage markets.  A coupon pass where they buy some agency debt would make a nice statement.