My 38 year rule that I have learnt in markets. When Central Banks (esp the US Fed) move faster than markets expect, the situation's worse than anyone's admitting.
On Wednesday night the US Federal Reserve announced new QE ($40bn per month) due to start in January 2026, then the next day they said - its stating this Friday. (Today)
We can debate it all you want, it is money printing with a clear focus: keeping the endless debt-refinancing machine going. The US financial system is not about managing interest rates to accelerate or slow down corporate investment and household spending; it's about refinancing existing debt and due to it’s massive size and term structure it’s all paring a bit troublesome at the moment.
The Numbers:
Monthly T-bill purchases: $40 billion
Start date: This Friday (not January)
Fed reserves: Dropped to "ample" (their word, not mine)
Timeline surprise: Weeks ahead of schedule
When the Fed moves this fast, they're not preventing a crisis. They're responding to one already happening, that only they are currently seeing.
The timeline tells you everything. Wall Street expected January. The Fed couldn't wait. That's not prudent planning. That's panic via a press release.
Pattern Recognition:
2019: Repo spiked to 10%, Fed launched "not QE" QE
2020: March madness, Fed printed $500bn overnight
2025: Emergency T-bill buying before Christmas
The difference?
This time they're acting BEFORE the headlines. Which means they're seeing something we're not. Yet.
What this really means is that the US Fed just told you the US money plumbing is broken and that is very very bad.