Everyday Is a Fed Day, One Way or Another...

Today was a non-POMO day, but it was a reverse-repo day. I don't quite understand why the Fed even bothers to do this, but it is an operation to suck liquidity out of the market by temporarily swapping a tiny part of the holdings at the Fed (Treasuries, agency, MBS) with money held by the counterparties.

Today's operation was $1.4 billion, significantly larger than the past sub-billion reverse repos.

The stock market predictably responded, up in the early going but surrendered all the gains and some more into the negative territory. Now Dow and S&P500 are above the unchanged mark (barely) and Nasdaq very slightly negative. Overall, unchanged for the day.

(Except for gold and silver. Crooks...)

The market is already looking to another Fed day tomorrow, POMO.

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