Actual growth slowdown will likely be worse than feared, says Andy Constan (youtube.com)
Andy Constan, adding shorts on any rally.
He thinks that, with QT2.0, the Fed has extended their balance sheet (through reinvestment policy), and now to bring it back in they will buy fewer or no bond LT treasuries, forcing the Treasury to issue that amount (that the Fed would have bought) into the marketplace, increasing the marketplaces of coupon bonds, and the private sector will have to absorb that.
$20b of 10-year equivalent WAM per month for 5 years, absorbed by the marketplace. To get weighted average maturity to 5 years (currently it's at 8 years), to get to the 2008 level. ‘Asset liability matching.’
He doesn't know why they bought MBS during the Pandemic Measures, given the housing market then.
Xai bought Twitter for $33b, and Musk values Xai at $80b.