Had to re read GoldiLocks on the NYFed’s statement of reverse repo tests. Here’s what THEY said – and we’d have to agree:
BOTTOM LINE: In a brief and relatively uninformative statement this morning, the New York Fed has announced that it will conduct “a series of small-scale, real-value transactions with primary dealers” in coming weeks. The statement says nothing concrete about timing of the transactions or the size, other than to say that size will be “very small” relative to the level of excess reserves, currently a bit more than $1trn. Statement also emphasizes that this is just a test and has no policy significance — i.e., that it does not represent the a step toward implementing an “exit strategy.” It therefore has no bearing on our view that the federal funds rate will remain at the zero to 25bp range throughout 2010.
NO BEARING ON THEIR VIEW THAT RATES UNCH (0-25bps) THROUGHOUT 2010. REALLY. (emphasis ours)