The Institutional Risk Analyst

Banks face a market in 2H 2026 where inflation is going to rise and prices for on-the run securities will likely fall. But the wall of money that has been manipulating individual technology stocks with impunity for months is going to go somewhere. In a world where the US Treasury is actively manipulating ST interest rates and arguably selling volatility, where do you hide?

What it says to me is every institutional portfolio has to think about holding some gold, if they want to protect themselves against extremes of default risk, some allocation permanently to gold. Now, should it be 3% or 4% or 5%? I don’t know. We can do what the europeans are doing and go 50% into non-dollar assets. In other words, we are in dollars. So, the only way to address US default risk is for us to own gold or something else. Because for us to own the CDS in dollars

Even as President Donald Trump demands rate cuts, the Powell FOMC is sharply reducing US economic growth estimates

Simply stated, with T-bills trading significantly above the yield on RRPs, there is no reason for MMFs to leave cash at the Fed