Forward Guidance Liquidity Is Breaking And The Economy Is Next | Michael Howell
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Apr 2, 2025 
Michael Howell, an expert in finance and the founder of Cross-Border Capital, shares his insights on liquidity in global markets. He warns of hidden stimulus tapering off by the Fed and Treasury, impacting the economy's ability to refinance debts. Howell discusses the disconnect between 10-year yields and mortgage rates while urging that central banks must shift focus towards balance sheet management. Additionally, he explores China's debt deflation strategies and how global liquidity patterns correlate with Bitcoin's price. A must-listen for finance enthusiasts!
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Imminent Liquidity Crisis
- The Federal Reserve's monetary policies, including quantitative tightening (QT), are approaching a critical threshold.
- This could lead to liquidity shortages as early as September 2025, impacting financial markets and the broader economy.
Hidden Stimulus and Economic Slowdown
- The Fed and Treasury implemented a hidden stimulus in 2024 through non-QE activities and short-term borrowing. This hid the true scale of monetary expansion and potentially influenced economic activity.
- This stimulus is now declining, contributing to an economic slowdown.
Debt, Liquidity, and Refinancing
- Focus on debt-to-liquidity ratios, not debt-to-GDP. Debt refinancing, not capital expenditure, is the current focus of capital markets.
- Central bank balance sheets must expand to facilitate this refinancing, or crises will occur.