The Institutional Risk Analyst

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

Last week our comrade at Zero Hedge astutely noted that, in the October 2012 FOMC minutes, Fed governor and soon to be Chairman Jerome Powell opined that the Fed has a “short” position in volatility. Powell said: “[W]hen it is time for us to sell, or even to stop buying, the response could be quite strong; there is every reason to expect a strong response. So there are a couple of ways to look at it. It is about $1.2 trillion in sales; you take 60 months, you get about $