The Fed’s Rate Tightening Policy Is Coming to an End Soon... And There’s a Way to Profit

[Inside Wall Street with Nomi Prins]( Welcome to Inside Wall Street with Nomi Prins! It’s the only daily newsletter featuring the insights of renowned author and former Wall Street insider, Nomi Prins. Every day, Nomi shines a light on a massive wealth transfer she calls The Great Distortion. That’s the true cause of the permanent disconnect she sees between the markets and the real economy. And she shares ways you can come out ahead, if you know where the money is flowing. You’ll find all Nomi’s Inside Wall Street issues [here](. If you have questions or comments, send Nomi a note anytime [here]( or at feedback@rogueeconomics.com. The Fed’s Rate Tightening Policy Is Coming to an End Soon… And There’s a Way to Profit By Nomi Prins, Editor, Inside Wall Street with Nomi Prins The government might not be telling you about its real money movements… But as I discussed [yesterday]( there’s one report that reveals all you need to know. It’s called the Fed’s H4.1 report. And there’s a line in it that shows the total amount of bonds the Federal Reserve is holding. In other words, it highlights the total amount of bonds the Fed bought with the money it printed under quantitative easing (QE). This is important for many reasons. Yesterday, I showed you how the size of the Fed’s balance sheet impacted 2-year Treasury yields after June 2022. Today, I’ll delve into what happened to the Fed’s assets after the recent banking crisis. Then, I’ll talk about one way you can profit from what the Fed’s report is currently telling us… Recommended Link [Flip Today’s Crazy Market to Your Gain]( [image]( 2022 was a bloodbath for the stock market. But those following Market Wizard Larry Benedict saw gains like: - 31% in 24 hours - 106% in three days - 79% in three days - 61% in three days - 120% in 11 days - And more… And these gains have come whether stocks go up or down! What’s Larry’s secret? In this short interview, he reveals his unique method – including the name of the ticker symbol you need to get started. [Click here for a private viewing.]( -- How the Fed’s Books Grew Again By March 12 of this year, Silicon Valley Bank (SVB) and Signature Bank had both collapsed. So the Fed jumped in to save the day. It created an emergency facility for banks, called the Bank Term Funding Program (BTFP), among other provisions. This involved printing a lot of money to bail out the big banks. (For more details, [catch up here]( That’s why the Fed’s H4.1 March 16 report showed the size of its book increase to $8.446 trillion. [Forget tech, crypto, bonds, and treasuries – buy these instead]( A week after that, the March 23 report showed the size of its book jump to $8.658 trillion. And a week after that, the March 30 report showed the size of its book rise to $8.696 trillion. That’s an increase of nearly $370 billion, in just three weeks… So the Fed’s book significantly grew as a result of printing money to help the banks. What’s more, this happened around the same time the Fed was tightening monetary policy to fight inflation. On March 22, when the Fed was growing its balance sheet, the Fed raised rates by another 0.25%. In other words, the Fed contradicted its own actions. And it revealed that no matter how tough the Fed talks about inflation, it will always rescue the big banks by injecting money into the system. This money printing and bond buying helped the banks and, by extension, the overall market. That’s why despite the initial downturn in the markets after SVB went belly up, most banks recovered quickly. Recommended Link [When the market bottomed out, he did THIS]( Brad Thomas nearly lost everything in 2008, and it was devastating… So he knew – after the crash of 2020 – people would want to sell and swear off investing forever. But he also knew this was too good of an opportunity for folks to sit on the sidelines… So, as the market approached its bottom on March 23rd, 2020 – he recommended buys on March 9th, 12th, 16th, 18th, and 20th, and even March 23rd. Anybody who followed his advice had the chance to lock in huge yields for unbelievable companies… And they’re positioned to get massive payouts for years to come. [image]( [Click here to see how Brad did it…]( -- What the Recent Bond Rally Means for Your Money After the Fed printed money to buy bonds, the bond market rallied. On March 13, The Wall Street Journal wrote: Turmoil in the banking sector sparked the biggest one-day rally in short-term U.S. government bonds since 1987. That’s because Wall Street went from selling bonds in response to the Fed’s quantitative tightening (QT) policy to buying them in huge amounts. Printing money and buying bonds are elements of QE policy, as I discussed [last week](. And one thing I’ve learnt is that the yield on the 2-year Treasury note is a key indicator for Wall Street and investors’ expectations about short-term interest rates. [Market Wizard Who Accurately Predicted 2022 Market Collapse Has Shocking New Forecast]( The Fed Funds rate is the name of the actual rate the Fed has jurisdiction over. So when you hear about the Fed hiking or lowering rates, that’s the name of the one it’s officially adjusting. The Fed Funds rate is also the rate that commercial banks use to borrow and lend from each other overnight, a very short-term period. Whenever the Fed adjusts the Fed Funds rate, it impacts other short-term rates, like the rate banks charge you for loans or pay you for your savings. So just know that when the Fed executes an action on rates, it is adjusting the Fed Funds rate, or leaving it alone, in some manner. Then, by extension, other short-term rates act in a similar fashion. The shorter the maturity of bonds, the more likely they are to move in lockstep with the Fed Funds rate. And I believe this is the case now. You see, right before the financial crisis and the SVB collapse, 2-year Treasury yields hit above 5%. This meant that demand for bonds was low. Recommended Link [How to collect an instant $1,420 – as many times as you like]( [image]( Would you like to know how to generate instant cash from a wide range of stocks… [But without investing a single dime upfront?]( This has nothing to do with dividends... taking out a loan… or anything like that. Best of all, anybody can learn how to do it. It doesn’t matter if you’re retired… or planning to retire. It doesn’t matter if you don’t have millions to invest… What you need is about 3 seconds to execute this simple financial maneuver… And you could be generating $230… $329… even $1,420 or more… In the next hour. [Click here to learn how.]( -- But once the Fed began printing money again, bond prices rose and yields dropped. In the week ending on March 15, the 2-year Treasury yield fell to 4.33%. That’s a near 13% drop in yield – all because the Fed said it would print money again. In the week ending on April 12, the 2-year yield dropped to the 3.95% level. Check out this action in the chart below. [Chart] And the fact that the 2-year yield hasn’t risen significantly since the Fed started printing money tells us one thing… It’s a clear sign that Wall Street believes the Fed’s tightening policy in short-term rates is coming to an end soon. Which is what we saw by examining its H4.1 report. The best way for you to take advantage of the Fed nearing the end of its rate tightening cycle and abandoning its QT policy is to focus on the 2-year bond like Wall Street does. The easiest way to do that in your brokerage account is to buy the exchange-traded fund (ETF), UTWO. It provides exposure to the current U.S. 2-year Treasury note. It’s also the most direct way to benefit as the ETF only holds the most recent 2-year Treasury bonds. This way, you don’t have to keep buying the bonds every time new ones are issued. Regards, [signature] Nomi Prins Editor, Inside Wall Street with Nomi Prins --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). MAILBAG Do you hold Treasury bonds as part of your investment portfolio? If so, how recently have you bought them? And in general, how do you think you’ve been impacted by the Fed’s actions? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). IN CASE YOU MISSED IT… [The world as we know it is ending]( The era of prosperity that we’ve enjoyed since the end of WW2 has ended. 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