Abet Chichi2

[chichi2]

Poomy, it is a normal transaction. In the US, the FOMC must report publicly any change their inventory of Money. The SOMA holds over $500 billion in inventory which includes about $450 billion Treasuries.

They say they are selling $7 billion means they are cutting inventory by a small amount. I do not know what their intended use.

However, my guess is that the moneys will be used to cover the FOMC action today which was shy about $7 billion.

It would normally be such a small amount that it will not effect the markets.

EXAMPLE
Thursdays are big expiration days for moneys they put into the Federal Reserve System so they have cash on hand. Today 45 billion mature. So far today, they have only announced putting 15.25 back into the system. So we do not know what they will do by end of day. If they were to not put back the other 30 billion the stock markets would tend to go down. They seem to know when the System needs more money and when it needs to have money taken out of the system. I do not expect the normally to withdraw monies as large as 30 billion. If they did, it would Cool the Markets down.

This week yesterday the Fed "Added funds" to the Market in the amount of 17.25 Net. That left us to guess why. 1) was it to cover a problem they saw coming? 2) did they want to "drive the markets up"? 3) did they want to maintain a stable market? 4) or for some other reason?

In Hind-Sight, we know the markets went down Large yesterday, so they may have seen that coming and were trying to help do number (3) and protect against (1).

As traders, we can watch the numbers that they are putting in and get Hints as to what the markets might be doing. Just one more little info, that might be useful.

Thanks for Asking,
Chichi2

you may call me "Chichi2"

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Abet is a verb that means "to help someone"
Abet has a connotation of "to help someone do something not necessarily legal. It therefore in English, is somewhat of a joke.

I chose the name because it alphabetized very early in the English Alphabet. Abet is not my first name.