The Federal Reserve Discount Window rate is up to 5.25% after the Federal Open Market Committee decided yesterday to increase its fed funds target range to 5.00% to 5.25%. At this writing, the Federal Funds Futures quote is 95.31 which reflects an average effective fed funds rate of 4.69%. Given that the target range was … Continue reading Interbank Market News Scan: What the fed funds futures market is telling me …
The takeaway: Joe Biden announces his re-election bid. Today, U.S. President Joseph R. Biden announced his candidacy for president in 2024. Since taking office in January 2021, Mr Biden has for the most part steered clear of adding onerous regulation to the banking sector. On the contrary, his infrastructure legislation and the spending that flows … Continue reading Interbank Market Scan: Latest Federal Reserve, Treasury rates of interest … and Joe Biden announces his re-election bid.
Should Mr Biden speak specifically to the inflation report, I expect that he will give some amount of credit to his inflation reduction and infrastructure initiatives that he has been implementing over the past two years. In theory, fiscal spending usually takes 18 months to move through the economy. Inflation, however, is a monetary phenomenon where there is an increase in money supply and not enough production in the economy to absorb the money supply. Continue reading Interbank Market News Scan: Inflation slows. Expect Biden to take a victory lap.
Mr Biden may have missed an opportunity to craft a narrative that emphasizes the importance of getting ahead of the inflationary impact of blocks of emerging economies threatening to transition from the US dollar to resource-backed currencies. These threats have yet to materialize into something definitive and until then the inflationary impact of dumping the US dollar or at least complementing it with other currencies is a way off. Continue reading Interbank market news scan: The jobs report wraps up the Holy Week.
Senator Elizabeth Warren, Democrat of Massachusetts, lit in, as usual, to Jerome Powell, chairman of the Board of Governors of the Federal Reserve System. Mrs Warren shared today on “Meet the Press” her dissatisfaction with Mr Powell’s handling of bank regulation in the wake of three bank failures: Silvergate Bank, Silicon Valley Bank, and Signature … Continue reading Unless Elizabeth Warren can persuade Joe Biden to fire Jerome Powell, the Chair is going nowhere …
Bankers came to the King and said, “We can help spread your influence and power by distributing your currency; by helping to coin the energy extracted from your subjects while validating these actions by funding your political economy. All we ask in return is to earn a spread on the loans, currency, and currency-denominated products … Continue reading Interbank Market News Scan: Inflation at 6% and the dollar index takes a hit.
While I believe that the FOMC will vote to raise rates, how much the rates increase by will be a decision driven by politics as it is by economics. The United States is entering the silly season of campaigning that runs up to the 2024 presidential election. As the expenditures stemming from President Biden’s infrastructure spending and financial support for Ukraine seep through the economy, the last thing the Administration wants to contend with is increased financial stress on American households. Mr Biden would prefer to see the Federal Reserve bring a pause to the inflation fight by the end of this spring, putting the pain into the past as soon as possible while crafting a narrative that places the full blame for inflation on the central bank. Continue reading Interbank Market News Scan: Hours away from Powell’s testimony, the Fed should do a one and done with the fed funds rate.
Lawyers Write the Bets. Bankers Sell the Bets. 