A Liquidity Masterclass: Preparing For A Credit Cycle Downturn | Darius Dale
Inflection Point
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The Fed's Reverse Repo Facility
FOGI Macro CEO Dariusz Kowalczyk: I agree that the bank term funding program and any other facility that they're going to introduce throughout this will eventually wind up as permanent residents on the Fed's balance sheet. However, the process of getting there to them becoming permanent residents requires pain. He says once you give the general public free money or free lunch, "they're going to cut" And so he thinks we'll have a phase two credit cycle downturn in which valuations are affected by tighter monetary conditions.
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