Global liquidity is once again expanding

 So much then for central bank quantitative tightening, the much-mooted unwinding of the massive stimulus programmes to support markets and economies.

In a world of excessive debt, large central bank balance sheets are a necessity. So, forget QT, quantitative easing is coming back. The pool of global liquidity — which we estimate to be about $170bn — is not going to shrink significantly any time soon.

The CBO estimates that Fed holdings of US Treasuries will have to rise to $7.5tn by 2033 from current levels of nearly $5tn. 

No QT here, but worse, these CBO spending projections are likely too low. More realistic numbers point to required Fed Treasury holdings of at least $10tn.

Michael Howell  FT 28 June 2023

https://www.ft.com/content/6d14cad1-00f2-4d39-969f-c01ae1860d34

The writer is managing director at Crossborder Capital and author of 

‘Capital Wars: The Rise of Global Liquidity’

https://www.amazon.com/Capital-Wars-Rise-Global-Liquidity/dp/3030392872