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: Should the State change its economic policy … The Government (the Executive and his Cabinet), with State approval, chooses capitalism and democracy as the political economic plan (policy) for managing the nation-state’s tax and profit extraction process. Since government is a human system, its managers will go off script and introduce chaos into … Continue reading Should the American State return to mercantilism?
On this first impression I expect both chambers of Congress to make the supposed banking crisis less of an issue especially as we move further into the campaign season. Congress, particularly congressional Democrats, do not want to be perceived as facilitators of a worsening political economy. Continue reading Interbank market news scan: Rates on Treasurys continue to inch up in week prior to Fed Day
The takeaway: A strategy for selling the idea of CBDCs: Paying labor by the end of the day. It is time for non-asset holding members of the labor class to look at ourselves as traders of time versus mere employees. The trader spends his or her day managing their financial and time capital converting one … Continue reading Interbank market news scan: How to sell the idea of CBDCs? By paying labor at the end of the day.
There has been a lot of chatter over the last year about the dollar losing its dominance as a world reserve currency. I believe that the dollar will not lose that dominance overnight. The bulk of its trading partners are in the Euro Zone and North America. I have no doubt that nations like France and Germany will try to maintain close ties with the United States and any China-Russia currency bloc that may ensue from the attempts of emerging markets to develop their own currency. Continue reading What is the US dollar?
Over the next twelve months, as rates fall any cheerleading about an economic upturn should be tempered by a narrative that a close eye is being kept on the economy and that disciplined expenditures are being made to keep moderate winds blowing into the economy’s sails. Continue reading Interbank Market News Scan: Betting markets see the effective federal funds rate dropping and that the Fed will not hike rates.
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.
I would think that given the U.S. economy runs on a fractional reserve platform that the Administration and the Congress would politely opine more on monetary policy. The Administration and the Congress appear to prefer the “kick the can across Pennsylvania Avenue and down Constitution Avenue” approach to monetary policy, mentioning it only when it is time to deflect criticisms on his handling of the economy. Continue reading Interbank Market News Scan: No political rhetoric today that impacts the overnight markets in the U.S.
The Federal Reserve would like to see a looser employment market, including reduced wage pressure and an uptick in unemployment. If these measures do not work to control inflation into 2024, more intrusive measures targeting consumer spending are anticipated. Continue reading Interbank market news scan: NFA issues rule to protect against manipulating bitcoin and ether prices.
Lawyers Write the Bets. Bankers Sell the Bets. 