The Institutional Risk Analyst

One aspect of the Powell press conference that has received too little attention was Powell's comments about Warsh possibly replacing Reserve Bank presidents. “That would be the beginning of the end of the Fed’s ability to make monetary policy independently,” he said, but the media did not notice. As we discussed in our interview with Alex Pollock, the 1935 amendments to the Federal Reserve Act made the chairman the CEO of the agency with unilateral power to remove Reserve Ba

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