To do this, the US Treasury Department must withdraw $ 600 billion from the markets.
Let us remind you that since August 1, the US Minin has been unable to attract new loans due to the extreme level of the national debt.
In 2019, the public debt ceiling was temporarily canceled and the Ministry of Finance was forced to increase loans to compensate for the temporary collapse of the monetary volume. Such an event will lead to a contraction of USD liquidity and may provoke a strengthening of the dollar.
Experts predict that a similar event will take place in October this year. The Treasury Department is expected to withdraw about $ 600 billion in liquidity from the private sector.
If the placement of public debt coincides with the termination of the purchase of assets, the markets will be able to survive the euphoria of 2013-2014.
During this period, the Fed stopped printing new money after continuously running the printing press for more than 5 years. As a result, the US dollar reached its 13-year high and brought down all commodity prices.
However, some experts expect the US currency to weaken, such as Commerzbank. There is a possibility that the new mutation of the Delta coronavirus will weaken the economy and the Fed will probably have to rethink its rate hike plans.
Last Friday, the head of the Fed, Jerome Powell, said that this year may begin to ease monetary policy, but also noted that he was in no hurry to raise rates.
Now all traders are awaiting data on the US labor market, which will be published today, this data will serve as a signal when the announcement of the curtailment of the printing press program may appear.
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