Credit Suisse’s #Zoltan warns of trouble in money market

I’m having a problem with a pipe running under Wall Street. And once again, the bank is calling Zoltan Pozsar.

Investors are starting to store hundreds of billions of dollars in the Federal Reserve every night, and no one can be sure what that means. The answer is that many look to 42-year-old Hungarian-born Credit Suisse analysts. This is known for accurately predicting esoteric market movements such as reverse buying, with statements such as “reserve sterilization begins”.

Published at least twice a week, Pozar’s Global Money Dispatch is the first reading for traders, bankers and policy makers interested in the internal workings of the financial system, and its comprehensive view and persuasion. Admired for its powerful analysis. The latest hot topic: Nearly $ 1 trillion is piled up in the once vague and rarely used Fed program known as the Reverse Repo Facility.

The facility holds short-term cash from money market funds, government-sponsored companies and banks and pays interest, which the Fed recently raised to 0.05%. It also helps to set the floor under short-term interest rates. Federal Reserve Board Chair Jerome Powell said the facility is functioning as designed while keeping the federal funds rate within that range.

Pozar, who worked for the Federal Reserve Bank of New York and the US Treasury before joining Credit Suisse in 2015, is one of those who are paying attention to the uncertain increase in inflows. To him, they signal an excess of cash. Financial companies are willing to accept the Fed’s small interest rates as they are flooded with funds from central bank pandemic stimuli.

Credit Suisse’s #Zoltan warns of trouble in money market

Source link Credit Suisse’s #Zoltan warns of trouble in money market

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