The Institutional Risk Analyst

Why does the US central bank need to pay interest on bank deposits at the Fed? Because we have $35 trillion in public debt. The interest rate on T-bills, bank reserves deposited at the Fed and reverse repurchase agreements (RRPs) issued by the Fed must be roughly the same.

We think it is reasonable to push expectations of a cut in the target for Fed funds into Q1 2025. 

The Biden Administration has no real strategy for addressing the growing stress in the market for government insured mortgages

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

We recently added Western Alliance (WAL) and GHLD to our portfolio

The US government now owns the largest reverse lender in the country.

Bankruptcy of Reverse Mortgage Funding may be first step in a systemic crisis affecting the government loan market