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What do you make of the RRP not going down? Is it a collateral issue that is  keeping money in RRP or the idea that RRP   is benefiting directly as Fed hikes  rates. Meaning US treasuries may not see the same  percentage move up in rate hikes as RRP because demand for US Treasuries could effect its day to day pricing?

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21 minutes ago, potatohead said:

What do you make of the RRP not going down? Is it a collateral issue that is  keeping money in RRP or the idea that RRP   is benefiting directly as Fed hikes  rates. Meaning US treasuries may not see the same  percentage move up in rate hikes as RRP because demand for US Treasuries could effect its day to day pricing?

Yep, they're sitting on it.  

Discussed here: 

https://liquiditytrader.com/money/FederalRevenuesProTrader/fedrevs040222.pdf 

Page 6

Call it fear, call it prudence, any way you slice it, it's bearish. 

For everything.  

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I had thought the RRP rate was 0.5% but it was .05 % I guess. They raised it to 0.3% last week. I mean I think that's right. So if .05% was enough to attract $1.6TN little wonder the total is rising again.

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21 minutes ago, Jorma said:

I had thought the RRP rate was 0.5% but it was .05 % I guess. They raised it to 0.3% last week. I mean I think that's right. So if .05% was enough to attract $1.6TN little wonder the total is rising again.

They could ladder 13 week bills at 0.55. Today that jumped to 0.71. 

It's not about "attracting." I've described it as a forced march.  It's about the $1.6 trillion in T-bill paydowns last year with a couple hundred billion more on the way right now. The Fed created the RRP as a super money market fund for money market funds that had nowhere to put that $1.6 trillion that the Treasury stuffed back into their pockets.    

4 week bills are at 0.17. 

So, yeah, money managers like it. Why not. It's like holding cash in the vault and getting interest on it. 

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Why 

5 minutes ago, DrStool said:

They could ladder 13 week bills at 0.55. Today that jumped to 0.71. 

It's not about "attracting." I've described it as a forced march.  It's about the $1.6 trillion in T-bill paydowns last year with a couple hundred billion more on the way right now. The Fed created the RRP as a super money market fund for money market funds that had nowhere to put that $1.6 trillion that the Treasury stuffed back into their pockets.    

4 week bills are at 0.17. 

So, yeah, money managers like it. Why not. It's like holding cash in the vault and getting interest on it. 

Why raise the RRP rate?

I get raising the RRP rate should raise bill rates so fits with the story that the Fed is "raising rates". Which is all well and good I suppose but it's a gigantic subsidy. $5bn/yr by my math, going not to the Treasury but to  institutions and their investors

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51 minutes ago, Jorma said:

Why 

Why raise the RRP rate?

I get raising the RRP rate should raise bill rates so fits with the story that the Fed is "raising rates". Which is all well and good I suppose but it's a gigantic subsidy. $5bn/yr by my math, going not to the Treasury but to  institutions and their investors

It is a subsidy. And so is IOER.  The worst part of it is that the Fed literally gave them the cash on which it now pays them interest. Talk about welfare queens. Jamie Dimon is the biggest welfare queen of all. All the bankers are.  Bloodsucking parasites. 

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