Year-End Funding Is Tight, But The Plumbing Looks Healthier

Authored by Michael Ball, Bloomberg macro strategist,

Front-end funding is heading into year-end looking tight, but not stressed - and that distinction matters because it takes one of the easiest macro volatility accelerants off the table.

The Fed’s bill purchases and paydowns have pulled Secured Overnight Financing Rates (SOFR) back inside the fed funds target range, a sign that liquidity conditions have normalized.