FED swap line operations reach ≈$600 bn

while the swaps are closed/repaid in less than a year, ≈80% of the repayment comes from newly issued wholesale debt

thus, ≈80% of the swap volume eventually becomes new currency in circulation

and then you wonder about inflation 😄

Illya Gerasymchuk 2025-06-29 13:43

💧FED swap lines = infinite liquidity pool

👉 here's how:

1️⃣ central banks exchange their foreign currency for USD, 7-80 days later, they reverse the exchange at the same rate + fee

2️⃣ central banks then lend these new USD to commercial banks

thus, USD demand is met