TFTC: A Bitcoin Podcast #654: The Fed Has Painted Itself Into a Corner with Michael Howell
33 snips
Aug 25, 2025 
Michael Howell, an expert in global liquidity cycles and monetary policy, shares his insights on the Fed's challenging situation amidst economic pressures. He discusses the shift towards collateral-dependent lending, rising debt refinancing issues, and the role of AI in capital expenditures. Michael highlights how these factors are creating a favorable climate for monetary inflation hedges like Bitcoin and gold, while also examining the impact of liquidity cycles on asset prices and the risks posed by digital currency competition.
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Fed Painted Itself Into A Corner
- Michael Howell argues the Fed has painted itself into a corner with policy and balance sheet constraints.
- He warns liquidity injections and operating-procedure changes are imminent and consequential.
Expect The Fed To Buy More Bills
- Watch for the Fed to shift SOMA composition toward short‑dated Treasury bills to ease funding stress.
- That move would relieve front-end funding but complicate balance‑sheet rolloffs and liquidity math.
Collateral Markets Drive Liquidity
- Collateral markets now dominate global lending, making low bond volatility essential for liquidity.
- Howell says policymakers appear to be engineering low volatility to keep hedge funds and basis trades active.
