The craziest thing about this is it allows banks to borrow against treasuries at par, even if the positions are underwater. That looks like a tell to me because it means they can keep raising rates while also pretending that bank bond holdings aren't getting crushed because of those hikes. Deeply disturbing stuff happening.
Bullets and butter baby!
Yes!
Can you please explain why JPow will probably not raise rates now?
I'm actually much less convinced of that take now and I'm working on an update that should drop tomorrow. This evening we learned financial institutions are essentially getting a blank check: https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm
The craziest thing about this is it allows banks to borrow against treasuries at par, even if the positions are underwater. That looks like a tell to me because it means they can keep raising rates while also pretending that bank bond holdings aren't getting crushed because of those hikes. Deeply disturbing stuff happening.