It's now official. The #WallStreetConsensus will soon be a book - about the return of the transformative state. There may be some Taylor Swift/Travis Kelce macrofinancial jokes (she inflation targeting, he Big Finance) in it.

the NYT ponders the mystery of why Gazans keep getting killed even though there's a ceasefire

oh finally Google takes a stand on Palestine Action and the hunger strikers the Labour government is letting die in prison.

Half a million followers for sharp insights level tortoise

https://t.co/kDbJK2g8Jo

Let me go a bit harder on this @zeitonline You talk about "Bestuerzung" (dismay) over a serious intellectual meeting about German politics and culture. I suggest you focus on this astonishing report on the ruination of Gaza and the question of who is responsible. h/t @wsj

been arguing for a while that central bank independence is an exhausted political form, just like its progenitor, liberal democracy. the world of transformative politics needs different institutions https://t.co/0IbjRTSvex

But outright purchases of government bonds, at preannounced large volume = Fed support for the price at which the US government issues bonds. It's a fiscal measure. It supports my claim -as liberal democracy is an exhausted political form, so has central bank independence.

These repo loans are typically extended for one, two weeks, and fine-tuned to meet banks' demand for reserves so that the interbank money rate (on reserve money) doesnt jump above the policy rate. Every central bank knows how to do this, and has done it before 2008.

It was passive unwinding - it didnt reinvest proceeds from maturing government/corporate bonds purchased after 2008 + 2020/21. We were told that smaller balance sheet would normalise liquidity conditions & return the Fed to repo loans as the instrument for reserve management.

wait, you ask, isnt this just normal open market operations? No. for past 3 years, the Fed pursued Quantitative Tightening, shrinking its balance sheet, and the amount of reserves (what we call base money or high powered money, the money banks use to pay each other).

Or, compare w pre 2008 reserve management tool - repo loans. The Fed lends against Treasury collateral, increasing supply of reserves/keeping liquidity rates at policy rate. The Fed has USD 17 bn outstanding repo loans. It will buy monthly twice as much as outstanding repo loans

How much is USD 40bn? Recall the recent hype around stablecoin issuers - the companies that Bessent claimed would strengthen US Treasury demand. These bought USD 40 bn Treasuries over June 2024-June 2025. The Fed would buy in a month what Tether + Circle buy in a year.

The Fed calls this Reserve Management Purchases but it's central bank support for government debt (and for Trump's policies more broadly), a form of monetary-fiscal coordination pervasive in the age of fiscal dominance after WW2.

Jay Powell/ Fed have quietly caved to Trump. US central bank independence is now a smokescreen. not because the Fed lowered interest rates yesterday, as Trump demanded. Less publicised, but more important, is the Fed decision to purchase USD 40bn of Treasury bills monthly.

remarkable that Martin Wolf wrote 1000 words on risk of stablecoins without mentioning eurodollar stablecoins - USD stablecoins that are 'fungible', that is, can be converted at par in USD in EU jurisdictions where rules on convertibility much stronger https://t.co/2c7KMWfEEq

the left has warned Starmer over and over again that drifting to the right on migration, on trans, on drug legalisation, on welfare is not going to win votes, but the man has the political instincts of a door stopper

‘It is a basic failure of intellectual hygiene to equate capitalism, in whatever ideological variant, with “the global economy”.’ I’m very pleased to have @NewLeftEViews make his @NewStatesman debut with this weighty piece, also our weekend essay:

the Trump Administration clarified that it views Europe as a vassal state - and will, I suspect, notch up the economic bullying we've seen this year. how will European politicians respond? https://t.co/Ng7gt8h031

and liberal naivete at its finest: if only MAGA looked at the numbers, the facts!

such exquisite bullshit in this 'until America invented woke, we were doing pretty well in Europe' take from Janan Ghanesh it nearly feels like the Onion