money market

Chicken Hawks

By |2018-09-26T18:23:47+00:00September 26th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

There had been whispers that the FOMC would have to undertake a second “technical adjustment” this year. Is it coincidence that the eurodollar futures curve inverted on the same day, June 13, Jay Powell announced the first one? Perhaps, but given what we are talking about here there is a fair chance they are related, [...]

The Fed Tries To Tighten By Rates, But The System Instead Tightens By Repo

By |2017-08-17T19:01:29+00:00August 17th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Fed voted for the first federal funds increase in almost a decade on December 15, 2015. It was the official end of ZIRP, and though taking so many additional years to happen, to many it marked the start of recovery. The yield on the 2-year Treasury Note was 98 bps that day. A lot [...]

Follow-Up on Bills; Supply Side

By |2017-06-26T16:51:54+00:00June 26th, 2017|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Returning to the theme of the parallel evolutionary developments in the early 20th century as compared to the last decades of it, in 1908 famed Gilded Age industrialist Andrew Carnegie wrote what seems today a misplaced article for New York Outlook magazine. The steel magnate lamented the state of American banking, which he called within [...]

Chart of Last Week: In Need of Official Address

By |2017-06-26T11:56:08+00:00June 26th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

According to the US Treasury, the calculated equivalent treasury bill yield for the 4-week maturity was 76 bps at Friday’s close. At such a short time frame there isn’t actually a single instrument that creates the rate, more of an amalgamation (spline) of various 4-week securities staggered on their own. The bill maturing this week, [...]

If You Believe There Was Too Much Money During The Monetary Panic, Then Why Not Heroin

By |2017-03-06T16:31:34+00:00March 6th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

November 2008 was an extremely busy month for authorities in the US. The financial markets had just undergone panic the month before, but rather than dissipate there were lingering indications that all was not yet over. On November 23, 2008, the Treasury Department, the FDIC, and the Federal Reserve issued a joint statement on Citigroup. [...]

Review 2011: The Trajectory of Official Views On Repo Confirms A Lot (And Raises Other Questions)

By |2017-01-31T17:46:37+00:00January 31st, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The release of the 2011 FOMC transcripts has provided some useful clarity on the thinking of Federal Reserve officials. Unlike in 2008, policymakers were a little better acquainted with wholesale money and its possible points of failure. They never did solve or even identify all of them, of course, but the repo market in particular [...]

Searching For 2a7 Comfort In CP And Finding Instead More Confirmation Of The Same ‘Something’

By |2016-09-28T17:10:07+00:00September 28th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

With 2a7 money market reform only a few weeks from its full implementation, there should be by now visible shifts in all the places where such reform will directly impact. Prominent among these money spaces is commercial paper, where the ranks of prime MMF’s that once lent in this market have been reduced in the [...]

Unresolved: Nine Years Later Still No ‘Dollars’

By |2016-08-09T19:18:17+00:00August 9th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The fact that we are still discussing illiquidity in “dollar” markets everywhere shows just how little has changed despite so much time and effort. It is August 9 again, the ninth anniversary of the day that changed everything. Even though it has been almost a decade, it’s as if “we” learned nothing from the experience. [...]

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