Quick take on rates and BRICS expansion: A slight increase in the fed funds futures rate from yesterday’s 94.565 rate. I don’t see this week’s U.S. political events having an impact on the interbank market.
Globally, Saudi Arabia, Ethiopia, Iran, Egypt, Argentina, and the United Arab Emirates have been invited to join the BRICS coalition. This is considered by commentators as a sign of further deglobalization. These moves are seen as a threat to the reserve status of the U.S. dollar.
Any reduction in the U.S. dollar’s status as the premier reserve currency is considered by some commentators as an event that will not take place for some time.
At issue currently is the division among current members as to how fast the coalition should grow. In addition, there is also the issue of having an infrastructure in place that can support the movement of financial capital in a bloc made up of 40% of the world’s population.
Alton Drew
24 August 2023
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Fed Funds Futures.
30-Day Federal Funds Futures rate=94.575
Source: CME Group.
Federal Reserve Reference Rates.
Discount window rate=5.50%
Interest on reserve balances=5.40%
Effective federal funds rate=5.33%
Overnight reverse repo rate=5.30%
Source: Board of Governors of the Federal Reserve System. Federal Reserve Bank of New York.
Treasurys.
30-year rate=4.42%
10-year rate=4.34%
Source: Board of Governors of the Federal Reserve System.
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