How U.S. Treasury Is Fighting The Fed | Nouriel Roubini & Stephen Miran on $800B “Stealth QE” — MarketVault

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How U.S. Treasury Is Fighting The Fed | Nouriel Roubini & Stephen Miran on $800B “Stealth QE”

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Forward Guidance is sponsored by VanEck. Learn more about the VanEck Morningstar Wide MOAT ETF (MOAT) at https://vaneck.com/MOATFG. New paper published by Hudson Bay Capital, written by Nouriel Roubini & Stephen Miran, “ATI: Activist Treasury Issuance and the Tug-of-War Over Monetary Policy”: https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/635102_Activist_Treasury_Issuance_-_Hudson_Bay_Capital_Research.pdf Nouriel Roubini’s book discussed in the interview, “Political Cycles and the Macroeconomy”: https://www.amazon.com/Political-Cycles-Macroeconomy-Alberto-Alesina/dp/0262510944 Nouriel Roubini’s latest book, “Megathreats”: https://www.hachettebookgroup.com/titles/nouriel-roubini/megathreats/9780316284059/?lens=little-brown Follow Nouriel Roubini on Twitter https://x.com/Nouriel Follow Stephen Miran on Twitter https://x.com/SteveMiran Follow VanEck on Twitter https://x.com/vaneck_us Follow Jack Farley on Twitter https://twitter.com/JackFarley96 Follow Forward Guidance on Twitter https://twitter.com/ForwardGuidance Follow Blockworks on Twitter https://twitter.com/Blockworks_ __ Timestamps: 00:00 Introduction 01:18 What Is "Activist Treasury Issuance" (ATI)? 08:00 The Mechanics Of How The U.S. Treasury Has Altered Engaged In "Activist Treasury Issuance" 20:52 VanEck Ad 24:21 Activist Treasury Issuance Played A Role In Boosting Asset Values, And In Avoiding A Recession (And Might Have Caused A "No Landing" Instead of a "Soft Landing") 29:53 History of Treasury's "Bill Share": GFC, Money Market Reform, March 2020 Panic 33:44 How Much Does Current Treasury Issuance Differ From Historical Issuance Patterns? 45:43 Permissionless Ad 46:46 Does Government Borrowing "Crowd Out" Private Investment? 59:09 Will ATI Continue In The Next Presidential Administration? 01:07:20 Long-Term Interest Rates Could Rise and Force a "Meaningful Repricing of Risk Assets" 01:10:49 It's Not Just The Fed - U.S. Treasury Has "Forward Guidance" Now Too 01:13:02 Nouriel Roubini's Closing Thoughts __ Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.

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About This Footage

This 2020 clip, featuring renowned economist Nouriel Roubini and Stephen Miran, is notable for its in-depth discussion on the unorthodox monetary policy measures employed by the US Treasury Department. The conversation revolves around "Activist Treasury Issuance" (ATI), a concept introduced in a paper co-authored by Roubini and Miran, which suggests that the Treasury has been engaging in stealthy quantitative easing to the tune of $800 billion.

The interview provides a unique glimpse into the inner workings of the US financial system, highlighting the complex interplay between monetary policy, fiscal policy, and market dynamics. Roubini's expertise, as evident from his book "Megathreats" and other publications, shines through in this discussion, offering valuable insights into the macroeconomic implications of ATI.

One of the most striking aspects of this conversation is the revelation that the Treasury has been using ATI to boost asset values and avoid a recession. While some might argue that this approach is akin to "stealth QE," Roubini and Miran contend that it has helped mitigate the economic downturn, potentially averting a recession in favor of a "no landing" scenario.

The clip also delves into the history of Treasury's "bill share," tracing its evolution from the Global Financial Crisis (GFC) to the 2020 market panic. This historical context provides a nuanced understanding of how ATI has evolved over time, with Roubini and Miran arguing that current issuance patterns differ significantly from those in the past.

A crucial aspect of this discussion is the impact of government borrowing on private investment. While some might worry about "crowding out" effects, Roubini and Miran suggest that ATI has not had a significant impact on private sector investment. This assertion warrants further examination, as it raises important questions about the efficacy of monetary policy in stimulating economic growth.

The conversation also touches upon the potential implications of ATI for long-term interest rates and risk assets. Roubini warns that rising interest rates could lead to a "meaningful repricing of risk assets," underscoring the importance of careful monetary policy management.

What makes this clip particularly noteworthy is its relevance to ongoing debates about fiscal policy, monetary policy, and their interplay in shaping market outcomes. As policymakers grapple with the challenges of navigating economic uncertainty, Roubini's insights offer valuable guidance for those seeking to understand the complex dynamics at play.

In conclusion, this 2020 clip featuring Nouriel Roubini and Stephen Miran is a must-watch for anyone interested in understanding the intricacies of monetary policy, fiscal policy, and their impact on market outcomes. The discussion provides a unique window into the inner workings of the US financial system, highlighting the complexities and nuances of ATI and its implications for economic growth and stability.

Editorial context researched and compiled from verified sources.