Excess Reserves

Five Takeaways From Yellen's Hearings On The Hill

Though the hearings lost much of their appeal when Dr. Ron Paul retired from Congress, the House Republicans have maintained a reputation for being far more hostile to the Federal Reserve than their colleagues in the Senatemanaging to generate some worthwhile moments. While little news was made, with Yellen maintaining her support for generally low interest rates, there were some points made this week worth noting.

40% Of The Fed's Interest On Excess Reserves Is Paid To Foreign Banks

Now that Congress is finally scrutinizing the $4.5 trillion elephant in the room, it may be interested to know that approximately 40%, or $838 billion in reserves parked at the Fed belong to foreign banks. This means that the Fed is giving a $10 billion (and rising) annualized subsidy to non-US banks every year.

Is This Why The Fed Is Raising Rates???

As the Fed is in the midst of a rate hike cycle, it seems important to remember why this cycle is like no previous rate hike cycle.  The mechanics of this hiking cycle are completely unique and experimental...thus the outcome is far more of an unknown than "normal".

Fed "Stress Test" Results Are Out: Everyone Passes Even As VIX Hits 70

Moments ago the Fed released the first phase of its annual stress test which, once again, found that all thirty-four of the US largest banks "passed", exceeding minimum projected capital and leverage ratios under severely adverse scenarios, based on their projected ability to withstand economic shocks

George Orwell's Monetary Policy

"Tightening is easing..." Monetary policy is a black box and former Fed chair, Alan Greenspan, acknowledged this more than 20 years ago...