Rafi Farber: Prepare for $400B in QT by March if Regional Bank Bailout Expires

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A “top man” at the Federal Reserve, specifically the “Vice Chairman for Banking Supervision, a super duper important guy, is extremely serious about the Fed not renewing the regional bank bailout program that exploded onto the Fed’s balance sheet last March to the tune of about $400 billion. If that’s the case, then come March, all those dollars are going to have to be repaid. This will squeeze 3 months worth of quantitative tightening into about 2 weeks come March. It is quite doubtful that the monetary system can handle such extreme pressure. Essentially, the repayment of the Bank Term Funding Program loans could very will be impossible without triggering yet another banking crisis.

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