Pause, 25bp or 50bp?; UBS; Why Did The Fed Ignore Ordinary Liquidation Authority? No Firesale Externality; I Keep Coming Back to Commercial Real Estate; SVB; Real Interest Rates
Excellent post. I concluded they will hike this week 0.25. Can give you a gift subscription to see behind the paywall if you like. https://open.substack.com/pub/measuringpolicyvolatility/p/macrovs1-yes-they-will-raise-rates?r=1yz4l6&utm_campaign=post&utm_medium=web Am less mystified by the SVB and Signature Bank interventions. I agree with Barney Frank that the Fed is at war with crypto and they were laying the foundation to launch FedNOW. My guess is that the policy team focused on the crypto issues and they failed to talk with the Sup & Reg team so they were blindsided when SVB started liquidating HQLA.
The stunning thing about the new bank support structure is that the Treasuries will be accepted as collateral at par. The even more stunning thing was to see the Fed actually saying in writing that they were asking banks not to sell their Treasuries. This tells me there's a big HQLA problem which goes well past SVB....particularly since the new lifeline was already at 50% capacity after just a few days.
Excellent post. I concluded they will hike this week 0.25. Can give you a gift subscription to see behind the paywall if you like. https://open.substack.com/pub/measuringpolicyvolatility/p/macrovs1-yes-they-will-raise-rates?r=1yz4l6&utm_campaign=post&utm_medium=web Am less mystified by the SVB and Signature Bank interventions. I agree with Barney Frank that the Fed is at war with crypto and they were laying the foundation to launch FedNOW. My guess is that the policy team focused on the crypto issues and they failed to talk with the Sup & Reg team so they were blindsided when SVB started liquidating HQLA.
The stunning thing about the new bank support structure is that the Treasuries will be accepted as collateral at par. The even more stunning thing was to see the Fed actually saying in writing that they were asking banks not to sell their Treasuries. This tells me there's a big HQLA problem which goes well past SVB....particularly since the new lifeline was already at 50% capacity after just a few days.