On the last day of the year, the Fed aggressively added reserves and pushed stop out rates on the repo auctions down dramatically, to levels well below the Fed Funds target. The aggressive action came even though Fed Funds had traded 24 basis points below target on Friday evening. All of which raises the question, why? Was it just a year end technical adjustment of some kind? Was the Fed acting to prevent a decline in the market on the last day of the year? Is there some news being held back that we’ll hear about over the holiday? Click here to download complete report in pdf format (Professional Edition Subscribers).Try the Professional Edition risk free for thirty days. If, within that time you don’t find the information useful, I will give you a full refund. It’s that simple. Click here for more information.
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