fbpx

open market desk

SOMA’s Been Talking For Over A Year: Jay’s Got Some Explaining To Do (bills)

By |2021-05-03T20:05:32-04:00May 3rd, 2021|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

This goes back to the earliest days of the Federal Reserve. In 1912 and even before, in order to sell the skeptical public on another central bank – the nation’s third, and first in three-quarters of a century - in what was already going to be an uphill battle, Congress demanded that this thing be called something other than a [...]

An Overlooked And Important Point: The Fed’s Overnight Repo Operation Had Less To Do With Repo Than You Are Led To Believe

By |2019-09-17T16:49:06-04:00September 17th, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There is one additional important point to note in all this repo uproar. Why did the Fed conduct the overnight repo operation this morning? The answer isn’t what you might think. It sounds like officials particularly at the Open Market Desk sounded the alarm about repo and the FOMC forcefully responded. And if you think that, policymakers would be beyond [...]

Currency Elasticity Only Applies Where There Is Currency

By |2015-12-23T12:05:11-05:00December 23rd, 2015|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Fed’s control over money markets has always been tenuous, a myth more than anything, it just wasn’t so obvious at one time. That observation extends to its grasp of even basic operations, a spectacular fail revealed by its 2000’s treatment of the Discount Window. On January 9, 2003, the FOMC altered decades of monetary history by switching the Discount [...]

How QE’s End Has So Many Confused

By |2014-12-15T16:48:50-05:00December 10th, 2014|Economy, Federal Reserve/Monetary Policy, Markets|

Now that QE is history (for the fourth time) there are a number of misconceptions about what is taking place at the Fed. All the action is located at FRBNY, which only makes the tangled spread of accounting classifications that much worse. Interbank activity has never been much of a widespread, household concept, so the relevance to current circumstances only [...]

The Bad News Of Repo Fails Subsiding

By |2014-07-16T16:12:27-04:00July 16th, 2014|Bonds, Currencies, Federal Reserve/Monetary Policy, Markets|

With the latest data from FRBNY in hand, the surge in repo fails authorities and certain credit market observers that were stressed over the affair, it is actually confirmation of regularity, and thus a high degree of systemic deficiency. Further, as a real world test, it ends any credibility the reverse repo program had as an institutional tool for maintaining [...]

Fed Not Buying TIPS, But Sudden Interest In 5-Year

By |2014-04-25T15:26:31-04:00April 25th, 2014|Bonds, Federal Reserve/Monetary Policy, Markets|

Unfortunately, the SOMA details for the week ended April 23 show no Open Market purchases of any TIPS. I say that is unfortunate because it would have provided an easy answer to the breakevens mystery I noted on Wednesday. As it is, the 5-year breakevens remain elevated on apparently well-bid 5-year TIPS. Swap spreads have decompressed almost fully in the [...]

Go to Top