Banks continue to tighten lending standards across all sectors. This has eased a bit from the July survey. Banks continue to widen spreads across all sectors. The percentage of banks widening spreads has also eased a tad. Banks are not seeing increasing demand for loans. I'm just posting survey results for C&I loans, the graph is very similar for commercial [...]
As an apparent consequence of post-Brexit uncertainty, the effective federal funds (EFF) rate moved up from 38 bps in “yield” to 40 bps, and then even 41 bps on June 27. That rather tame reaction is due to the fact that there is nobody aside from primarily GSE leftovers trading in federal funds. That the market rate moved even 3 [...]
This chart from our strategic macro research partner shows the incredible length of stimulus. Has the current, prolonged period of unchanged FED policy rate of 0% conditioned investors to think this level of interest rates is the new normal? The FOMC looks to be ready to embark on a period of raising interest rates. If 10 yr bond yields [...]
With funding markets and currencies showing pessimism once more with regard to the “dollar”, waiting for confirmation from TIC presentations is less than desirable. The Federal Reserve offers an alternate measure listed on its H.4.1 as a memoranda item. It tracks what the Fed holds in direct custody for foreign central banks and other “official” accounts and conduits. The holdings [...]
There is more than a passing interest in the 1937 retrenchment or what amounted to a “depression within a depression.” Numerous large-scale similarities abound between what occurred in the middle of the 1930’s and what is shaping up in the middle of the 2010’s. That makes for reasonable study about the very core and basic elements of finance that seem [...]
“Dollar” credit markets are completely unconvinced by the Establishment Survey that economic growth is at hand. Not only has this bearish/tightening trend been in place for over a year, uninterrupted too, it has actually picked up in the wake of last week’s “unquestionable” payroll expansion. The bearishness continues on all fronts, in tandem with oil prices which is not a [...]
Following up on the previous post about the state of mortgage and finance post-tightening, we are beginning to see the first vestiges of a full reversal in housing. Construction activity has leveled off, and may even be declining depending on the individual measure. There has been hope that the collapse in mortgage demand would be “contained” in refis, but, as [...]
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