Monetary Matters with Jack Farley Is It Enough? Michael Howell on Money Market Turbulence, Standing Repo Facility, and Why Fed Balance Sheet Expansion Is Inevitable
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Nov 10, 2025 
Michael Howell, Head of GL Indexes and author of Capital Wars, dives into the murky waters of Fed liquidity and balance sheet dynamics. He discusses the surprising end of Quantitative Tightening and argues that a new era of 'not-QE' is upon us, highlighting the inevitability of Fed balance sheet expansion. Howell reveals how Treasury-bill purchases could ease conditions yet warns of inflation risks. He also explores the ramifications of repo market spikes, the debt-liquidity nexus, and why adequate reserves remain a looming issue.
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Fed Balance Sheet Expansion Was Inevitable
- Shortages in US money markets and repo spikes forced the Fed to end QT and reverse course.
- Michael Howell argues Fed balance sheet expansion is inevitable to restore liquidity.
Not-QE Still Adds Real Liquidity
- The Fed calls its operations "not QE," but purchases of T-bills still expand reserves and liquidity.
- Howell: names aside, buying treasuries increases bank reserves and money-market liquidity.
Bill Purchases Alter Portfolio Duration
- Buying bills can still change private-sector portfolio duration and push investors into longer-duration assets.
- Howell: combined Fed bill purchases plus Treasury bill issuance can reduce private-sector duration and inflate asset prices.