The Institutional Risk Analyst

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

As the scale of Fed open market operations grew since 2008, volatility has increased, rendering the adjustment from QE to QT problematic

Demand for risk-free collateral and liquidity is largely a function of how JPMorgan (JPM) CEO Jamie Dimon feels about risk on any given day

QE has created a gigantic interest rate mismatch across markets for banks, non-banks and other financial intermediaries including the GSEs

Net, net, the dynamics in the market are actually forcing interest rates down