The Institutional Risk Analyst

It’s time for the Fed to get smart on duration risk before circumstances create another money market crisis. 

The markets got their rate cut over the past six months and now may have to give some of that back.

If President Donald Trump wins in November, he’ll be more than justified in demanding Jerome Powell’s immediate resignation.

As the federal debt rises, bank reserves must rise as well and with it inflation.

In 2019, the FOMC essentially nationalized the US money markets, eliminating private price discovery for a representation of a market.

Notice that the Fed stress test is silent on trillions of dollars in mark-to-market losses facing US banks from COVID-era securities

Powell won’t hit the two percent target, but he won’t change the target either.

Perhaps Chairman Powell will be kind enough to fall on his sword on way out the door to make things easier for a future Chairman Waller...

More often than not, Fed Governors use media appearances to enhance their personal celebrity rather than doing their jobs.

This morning, banks are buying funding from the BTFP below 4.85% and selling Fed funds at 5.5%. 

Instead of seeking authority from Congress, Chairman Bernanke and other members of the FOMC merely turned on the public spigot.

As with the Volcker Rule for banks, the move to centralized clearing of Treasuries and T-1 settlement seems destined to reduce liquidity

If the FOMC raises fed funds further, bank failures and perhaps even a market access crisis for the Treasury are next.

Until Chairman Powell comes clean with the Congress and the American people, more banks will inevitably fail.

The Treasury and Fed cannot admit fault for fear of bringing the whole house of cards crashing down.

The Fed by definition cannot make a profit and is always an expense to the Treasury, thus operating losses are a expense to the taxpayer

The US banking industry has been rendered insolvent by the Federal Open Market Committee

There are literally dozens of banks in the US made insolvent by the policy moves of the FOMC over the past year.

The cult of ever falling interest rates goes back 50 years and spans the terms of Fed chairs back to Alan Greenspan and Paul Volcker...

Little attention is being paid to the collateral damage being done by the FOMC to the debt capital markets