As this is a note on U.S. monetary policies, it is perhaps fitting to begin with an apparently lost Wall Street art of "Fed-watching."
Media reports of reportedly sudden "discoveries" of the Federal Reserve's radical policy changes should be yesterday's news for analysts who make the effort of looking at the U.S. central bank's balance sheet, and who know how to read it.
A slowdown in the downward adjustment of the monetary base — known as "M0," and the only measure of money supply the Fed directly controls — became quite clear in January, through to mid-March.
Between January and the last reserves report on March 13, the Fed raised its asset holdings by $61.7 billion, while still leaving the high-powered money 9.7 percent below its level from a year earlier.
That offered some support to U.S. fixed-income markets because, over that period, the yields on Treasury's two-year maturities fell 34 basis points, and remained virtually stable on the benchmark ten-year note.