This coming week, the Fed's term repo operations will be reduced from $35 billion to $30 billion. While this will slowly pull back the Fed's involvement in the repo market, their T-bill purchases will more than outpace lost repo support.... Read More
On January 6, 2020, Jim participated in DoubleLine's inaugural Round Table Prime to discuss his outlook on the global economy, central bank policy and much more... Read More
The growth in coronavirus infections has continued along a geometric progression for the last 12 days. While not overlooking the human tragedy, the markets have the difficult task of pricing an event that has a small chance of being devastating to global growth, but a more likely outcome of being contained.... Read More
Our latest Bloomberg column argues the Fed's response to the repo market's liquidity problems is not a long-term fix, but a simple tweak to the daily operations can help.... Read More
The Fed is uninverting the yield curve to change perceptions about an impending recession, adding liquidity to finance securities transactions, and signaling they are ready to make market difficulties go away. If the definition of QE is a policy that impacts financial markets, then this is indeed QE.... Read More
A look at foreign net sales and purchases of U.S. Treasuries, agencies, corporates and equities through November... Read More
High yield bonds have begun to trade like an index as electronic and ETF trading become more prominent in the credit world. This is concerning as the high yield market is too idiosyncratic for this to be the case long-term.... Read More
The risk in the repo market is no longer a lack of liquidity. Rather, because the Fed's support system does not charge a penalty rate, banks have little incentive to pull back from the repo facility. This leaves the Fed with few clues as to when the system is properly funded, risking an oversupply of liquidity.... Read More
A look at the maturity schedule of the Fed's balance sheet... Read More
Investors were hard-pressed to find a major asset class that went down in value in 2019.... Read More
A discussion of the Fed's repo support and the similarities to the Y2K special lending facility.... Read More
For both the stock and bond markets, the first day and week of the year are often the most volatile. ... Read More
The Fed insists that their repo support operations are "not QE" and therefore are not influencing financial markets. 20 years ago the Fed did something similar and it seemed to have a profound effect on financial markets.... Read More
On Friday Jim was on Bloomberg's Real Yield hosted by Jonathan Ferro. The other guests were Kathy Jones of Schwab and George Bory of Wells Fargo. The show had three segments, Yield of Dreams, CCC No Evil, Fear No Evil, and Conviction Trades for 2020.... Read More
