For the first time in the credit debacle saga, the Fed actually pushed money market rates lower, injecting liquidity even with the Fed Funds rate well below target. They pushed the rate on Treasury backed collateral down to nearly 3%, a full 225 basis points below the target, and kept the rate on MBS and Agency collateral about 25 points below the target. Prior to this point the Fed has mostly been draining liquidity when the funds rate was below target. Today is the first sign of a de facto cut in rates. They haven’t formalized it yet, so it may just be temporary, or there could be a “strategically timed” announcement on the drawing board. I continue to suspect that the market will sell off sharply when they make it official. 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.
