The Institutional Risk Analyst

The Fed's actions in 2008 and again in March 2020 were largely driven by the sole mandate of the central bank -- to keep the Treasury market opening and functioning.

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

If the FOMC raises the target rate for fed funds further, then banks like CMA are likely to come under renewed selling pressure.

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

At the Fed, because “confidence” is considered a factor in “policy,” it is OK to fib and obfuscate about the true cost of monetary policy.

Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell are another bank failure or two away from returning to the private sector.

The Federal Open Market Committee has arguably lost control of monetary policy and has placed America's banks in grave risk.

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

Investors who were buying large caps at 2x book value a year ago are now running away from bank stocks just as fundamentals improve...

Interest rates are starting to be very positive, and bank deposit rates are barely moving, so pretense of fintech as bank killer is over

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

Issuing CMOs via the GSEs could help the FOMC out of its trading mess, but represents a monumental irony.

The reduction in the Fed's balance sheet is the largest ever margin call on equity exposures of all descriptions.

Chairman Powell’s demeanor during the press conference when he spoke with Mike McKee suggests a man who knows he has a problem.

We think the chart below from FRED is worth any amount of words on the impact of QE on equity market valuations.

And in the meantime, we view the end of QE as a net negative for global stocks as well as crypto. Everything is correlated in a crowd.

Look for the FOMC to act early and go big in terms of forward repurchase agreements at the first sign of liquidity stress.

When Treasury market yields trade and stay negative, look for the Federal Reserve Board to come to the rescue of MM funds and banks.

US banks are running at income levels that are less than half of a year ago...

The risk presented by changes in behavior compelled by COVID have only begun to emerge into view in urban commercial real estate...