Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve’s System Open Market Account (SOMA) portfolio.
When push comes to shove, the Fed’s got nothing
In accordance with the FOMC Directive issued September 18, 2019, the Open Market Trading Desk at the Federal Reserve Bank of New York will conduct an overnight repurchase agreement (repo) operation from 8:15 AM ET to 8:30 AM ET tomorrow, Thursday, Sept…
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.
The Fed has a money market crisis on its hands. It’s a “crisis” that everyone should have seen coming because the handwriting has been on the wall for months.
What happens when the Fed does things…and the market doesn’t respond accordingly?
I have been warning for months that once the debt ceiling was lifted the money markets would tighten dramatically. It’s happening. Here’s a rundown of…
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.
Nasty Number Four: Repo Chaos, TAF Makes A Comeback, and EFF Shows Us How Inept Officials Really Are
US money markets are in a state of visible disarray. When repo is front page news that can’t be good.