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.

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