Fed's Reverse Repo

This is the second time this week the Fed has conducted a reverse repo. I'm not sure what the end game is here, but it seems between the extraordinarily large number of Fed regional presidents and voting members holding speaking engagements this week and the hawkish tone of them, it would seem at a minimum that the Fed is letting the market know that QE3 is not a foregone conclusion and perhaps that QE2 might not even make it to the end of it's scheduled operation.

Inflation seems to be the key here. Inflation has been evident for quite some time in manufacturing reports and MIT's recent projection of a rate of inflation near 8% for 2011. This may be causing the Fed actions.

Here's more on the story...