Monetary Matters with Jack Farley Is It Enough? Michael Howell on Money Market Turbulence, Standing Repo Facility, and Why Fed Balance Sheet Expansion Is Inevitable
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Nov 10, 2025 
Michael Howell, Head of GL Indexes and author of Capital Wars, dives into the murky waters of Fed liquidity and balance sheet dynamics. He discusses the surprising end of Quantitative Tightening and argues that a new era of 'not-QE' is upon us, highlighting the inevitability of Fed balance sheet expansion. Howell reveals how Treasury-bill purchases could ease conditions yet warns of inflation risks. He also explores the ramifications of repo market spikes, the debt-liquidity nexus, and why adequate reserves remain a looming issue.
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Treasury Monetization Feeds The Real Economy
- Transition from Fed QE to Treasury-driven monetization channels liquidity more into the real economy.
- Howell expects that monetization via bills could lift money growth and be inflationary in 2026.
Watch Fed Personnel And Policy Tilt
- Monitor FOMC composition closely because personnel choices will shape the response to rising inflation.
- Prepare for policy divergence if new appointees push for lower rates amid monetization.
Liquidity Momentum Trumps Absolute Level
- Howell's Fed liquidity metric maps net Fed/Treasury flows into bank reserves and money-market liquidity.
- He treats liquidity momentum (rate-of-change) as a leading signal for asset markets, not just absolute levels.