Election AV: The arbitrary spending limit that shall not be named

The d— ceiling could soon start looming over money markets yet again if the Democrats don’t sweep the House and Senate. (Why won’t it just die?)
Continue reading: Election AV: The arbitrary spending limit that shall not be named

The d--- ceiling could soon start looming over money markets yet again if the Democrats don't sweep the House and Senate. (Why won't it just die?)

Continue reading: Election AV: The arbitrary spending limit that shall not be named

The Fed’s slow march into collateral intermediation

The Fed sure seems to be getting comfortable with the idea of acting as a centralised counterparty for collateral transactions. It’s unclear whether the market’s quite as enamored with the idea.

This year’s Jackson Hole conference was on monetary policy implementation, which often serves as a shorthand for the following questions: how should the Fed control interest rates, and how big of a role should it play in financial markets?

While the topic seems arcane, it’s important to understand how thoroughly the Fed has changed its approach to controlling interest rates (and through that, its relationship with markets). The topic isn’t just for technocrats — the debate now is over whether that change should be a permanent one.

Continue reading: The Fed’s slow march into collateral intermediation

The Fed sure seems to be getting comfortable with the idea of acting as a centralised counterparty for collateral transactions. It's unclear whether the market's quite as enamored with the idea.

This year's Jackson Hole conference was on monetary policy implementation, which often serves as a shorthand for the following questions: how should the Fed control interest rates, and how big of a role should it play in financial markets?

While the topic seems arcane, it's important to understand how thoroughly the Fed has changed its approach to controlling interest rates (and through that, its relationship with markets). The topic isn't just for technocrats -- the debate now is over whether that change should be a permanent one.

Continue reading: The Fed’s slow march into collateral intermediation

Liquidity regulations could help Fed policy transmission, or maybe just non-bank lenders

Obvious statement: Banks are crucial for the transmission of monetary policy into the US economy.
Not-so-obvious theory: Bank lending might become more important in that transmission because of post-crisis liquidity requirements. This one is interestin…

Obvious statement: Banks are crucial for the transmission of monetary policy into the US economy.

Not-so-obvious theory: Bank lending might become more important in that transmission because of post-crisis liquidity requirements. This one is interesting because it comes straight from the blog of the New York Fed, the guys in charge of US monetary policy implementation.

But if reserves do return to normal levels, that means even more credit risk could be pushed off of banks' balance sheets. And that could leave an even bigger role for non-bank lenders and asset managers.

Continue reading: Liquidity regulations could help Fed policy transmission, or maybe just non-bank lenders