The Safe Asset Squeeze Is Coming, And It Could Push Money Toward Equities

Deep Value Investing10.03K FollowersFollow5ShareSavePlay(9min)Comments(4)SummaryI strongly believe that the ongoing Fed reserve management buying of ≤3-year treasuries (with no end date) will compress short yields, shrink safe supply, and push portfolios toward equities into 2026.Powell framed this decision as implementation, not a restart of QE. That said, the NY Fed laid out $40B of purchases from December 12, 2025, to January 14, 2026.Expansion of bank reserves is set to ease lending, favoring debt-reliant big tech names like Oracle or the neocloud players, particularly for large CapEx commitments.With Trump’s pro-cut stance, I expect a dovish Fed in H2 2026. Markets price just one cut by the end of 2026. I think we could see more than that.In the near term, keep an eye on the November jobs and CPI data. If the SPY breaks below $680, a Santa Claus rally is unlikely. AlexRaths/iStock via Getty Images In my last coverage on the broader markets, I argued the December cut was largely priced in and that the focus will be on the outlook for 2026. Now that the Fed has cut 25This article was written byDeep Value Investing10.03K FollowersFollowSmall deep value individual investor, with a modest private investment portfolio, split approx. 50%-50% between shares and call options. I have a B.Sc. in aeronautical engineering and over 6 years of experience as an engineering consultant in the aerospace sector. The latter statement is not relevant in any way whatsoever to my investment style, but I thought to add it for self-indulgent purposes. I have a contrarian investment style, highly risky, and often dealing with illiquid options. How illiquid? Well, you can land a Jumbo on the spread and still have clearance for take-off. From time to time, I buy shares, mostly to not be categorized as a degen by my fellow investor friends, therefore the 50%-50% allocation. My timeframe tends to be between 3-24 months.I like stocks that have experienced a recent sell-off due to non-recurrent events, particularly when insiders are buying shares at the new lower price. This is how I often screen through thousands of stocks, mainly in the US, although I may own shares in banana republics. I use fundamental analysis to check the health of companies that pass through my screening process, their leverage, and then compare their financial ratios with the sector, and industry median and average. I also do professional background checks of each insider who purchased shares after the recent sell-off. I use technical analysis to optimize the entry and exit points of my positions. I mainly use multicolor lines for support and resistance levels on weekly charts. From time to time I draw trend lines, taken for granted, in multicolor patterns. Note: I tried to keep my introduction as real, and authentic as possible. I dislike empty suits, high-level BS, deep-level BS, unnecessary jargon, and self-indulgent, third-person written introductions with an air of superiority.Thanks for reading my introduction!Analyst’s Disclosure:I/we have a beneficial long position in the shares of SOXL, SPY, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.