Once again, the Federal Reserve is re-engaging in its familiar practice of money printing…
Earlier this month, it discreetly acquired a staggering $43.6 billion worth of U.S. Treasuries. This included an impressive $8.8 billion in 30-year Treasury bonds on May 8, along with $20.4 billion in 3-year Treasury notes and $14.8 billion in 10-year Treasury notes just days prior.
What’s happening? Isn’t the Federal Reserve theoretically supposed to be tightening its balance sheet instead of easing it?
Recall that the Fed created about $5 trillion in credit to mitigate the fallout from the coronavirus crisis, leading to its balance sheet peaking at over $8.9 trillion in April 2022. Through a process called quantitative tightening, the balance sheet was gradually reduced to $6.709 trillion by April 28. Yet, as of May, there has been a slight uptick, bringing it to over $6.713 trillion.
The Federal Open Market Committee’s statement on May 7 claimed, “The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities.”
Still, if the Fed’s balance sheet is increasing rather than decreasing, does this not contradict its own policy statement? Continue reading
The ongoing saga of trade tariffs continues to unfold in 2025…
On Monday, a joint statement from Geneva revealed that the United States and China have agreed to a 90-day pause on recently imposed tariffs. During this period, they aim to “move forward in the spirit of mutual opening, continued communication, cooperation, and mutual respect.”
The exact implications of this declaration remain uncertain, yet it has fostered a sense of optimism among investors, which is precisely what was needed.
For practical purposes, U.S. tariffs on Chinese imports will be reduced from 145 percent to 30 percent, while China’s tariffs on U.S. imports will decrease from 125 percent to 10 percent.
Wall Street reacted positively to this news, leading to a significant surge in buying. By the end of the day, the S&P 500 had jumped 3.26 percent, and the NASDAQ saw an impressive 4.35 percent gain.
How delightful. The earlier dip known as Liberation Day has been reversed, and both the S&P 500 and NASDAQ have returned to early-year levels. Continue reading
This week, Federal Reserve Chair Jerome Powell and the Federal Open Market Committee (FOMC) decided to maintain the federal funds rate within the target range of 4.25 percent to 4.50 percent. The rationale behind this decision was to balance the risks of rising inflation and increasing unemployment amidst uncertainty about “which way this will shake out.”
This decision did not sit well with President Donald Trump, who is advocating for interest rate cuts to ease the potential fallout from his tariff policies. Ahead of the FOMC meeting, Trump even expressed his dissatisfaction on Truth Social:
“There can be a SLOWING of the economy unless Mr. Too Late [Powell], a major loser, lowers interest rates, NOW.”
Reducing interest rates could assist Treasury Secretary Scott Bessent in managing the $1.07 trillion in government debt that is to be borrowed between April and September. Furthermore, lower rates would likely weaken the dollar, making American goods more competitive abroad—a goal that aligns with Trump’s vision to enhance American manufacturing. Continue reading
A whirlwind of terror, confusion, and regret enveloped Gary Hoy in his final moments.
As the 38-year-old lawyer at the Toronto law firm Holden Day Wilson plummeted to the streets below, he had just showcased his faith in the safety of his office’s floor-to-ceiling glass.
Hoy, who also held a degree in engineering and specialized in building safety, had often demonstrated the strength of these windows by hurling himself against them, resulting in gasps and cheers from onlookers.
On July 9, 1993, while giving a tour to a group of students, Hoy decided it was time for another demonstration. After explaining the rigorous safety standards of the windows, he took his customary running start and launched himself against the glass. But unexpected disaster struck… Continue reading
