It wasn’t one and done like Chairman Powell had initially indicated, this “midcycle adjustment” hits two. And that is it, at least if you believe the current calculations spit out by the Fed’s models.
The FOMC will surely declare the repo operations a complete success. They were not.
When push comes to shove, the Fed’s got nothing
The story gaining traction in the mainstream is that the combination of dealer space (lack of) and a tax-receipt related drawdown at Treasury has left the funding markets uniquely exposed.
What happens when the Fed does things…and the market doesn’t respond accordingly?
Before the Great “Recession” ended the business cycle as we once knew it, there was a widely accepted concept known as stall speed. In the US, if GDP growth decelerated down to around 2% it suggested the system had reached a danger zone of sorts. In a such a weakened state, one good push, or […]
Why did the Fed conduct the overnight repo operation this morning? The answer isn’t what you think.
US money markets are in a state of visible disarray. When repo is front page news that can’t be good.
Finally, finally the global bond market stopped going in a straight line. I write often how nothing ever does, but for almost three-quarters of a year the guts of the financial system seemed highly motivated to prove me wrong. Yields plummeted and eurodollar futures prices soared. It is only over the past few weeks that […]
Officials in China seem to be taking a page out of Mario Draghi’s playbook. Before Europe was pushed to the bring of recession, the President of Europe’s central bank would downplay any weakness in the European economy. In 2018 especially, Draghi frequently referred to 2017 as if it was something special. No cause for concern, […]