The Macro Minute with Darius Dale What are “Reserve Management Operation Purchases,” and when will investors be gifted this latest form of socialism for the rich?
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Nov 26, 2025 Dive into the intriguing world of RMOPs, a covert form of quantitative easing that could reshape markets rapidly. Discover the Fed's potential shift from QT to balance-sheet expansion and its implications for risk assets. Hear about the latest S&P rally and upcoming rate cuts influenced by unexpected leadership signals. Explore the origins of bank reserves, and the delicate balance between regulation and policy adaptation. Darius also explains the U-shaped economy, offering strategic insights for savvy investors.
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RMOP Is Stealth Debt Monetization
- Reserve Management Operation Purchases (RMOP) are a stealth form of debt monetization aimed at easing repo funding strains.
- RMOP functions like perpetual QE and would expand the Fed's balance sheet to supply bank reserves and lift asset prices.
Markets Now Price Early And Multiple Cuts
- Money markets price a high probability of Fed rate cuts and expect multiple cuts into 2026 after dovish commentary.
- These shifting expectations force questions about where the Fed will obtain the bank reserves needed to support funding and fiscal expansion.
Officials Hint At Balance Sheet Re-Expansion
- Treasury and Fed officials signaled the Fed may transition from QT to a neutral, then expanding balance sheet to maintain regulatory reserve minimums.
- Fed Governor Christopher Waller said balance-sheet minimums are ultimately set by the regulatory framework, linking regulation to monetary policy choices.