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There is no actual "Taper" since January


muscleman
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http://www.bankregdata.com/articles.asp

 

Interesting article. The view is that if we combine the treasury purchases from the mega banks and Fed, the tapering is actually zero since January.

Why did these mega banks ramp up purchasing so much? Were they pushed by the Fed to do this?

 

Are these banks able to continue doing this? I  think based on their earnings, if they were pushed by Fed to do this, they actually can. Fed has some levers to push the banks, such as "stress tests".

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I'm on vacation with only my ipad and the article won't render on it, so my comments may be out of context... I recently read that the FED is thinking of paying interest on the funds banks keep in their reserves as an alternate to adjusting the fed funds rate because banks have so much cash on hand that adjusting the funds rate would have little effect. Perhaps big banks are loading up their reserves in anticipation of this?

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