Fed May Announce $450M Monthly Bond Purchases, Predicts Former NY Fed Expert

2025-12-08 17:31

Mark Cabana, a former New York Federal Reserve repurchase expert, anticipates that Fed Chair Jerome Powell will unveil a $450 million monthly Treasury bill purchase plan at the December 10 FOMC meeting. This initiative, expected to start in January 2026, aims to boost liquidity amid tightening conditions in the repo market. Cabana highlights that current reserve balances are insufficient, prompting a potential reversal of quantitative tightening. UBS's trading division supports this forecast, suggesting a similar plan with $400 million in monthly purchases. The anticipated policy shift coincides with Powell's term nearing its end, amid speculation about Kevin Hassett as a potential successor.

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