Problems are brewing in the pipes passing under Wall Street. And again, the banks call Zoltan Pozsar.
Investors have started storing hundreds of billions of dollars in the Federal Reserve every night, and no one really knows what that means. For answers, many turn to the 42-year-old Hungarian-born Credit Suisse analyst, known for accurately predicting dark market movements like reverse buyouts with statements like, “So sterilization reserves begins. “
Mr. Pozsar’s Global Money Dispatch, published at least twice a week, is the first read for traders, bankers and policymakers interested in the inner workings of the financial system, hailed for its comprehensive view and compelling analysis. The latest hot topic: The nearly trillion dollars piling up in a once obscure and little used Fed program known as the reverse repo mechanism.
The facility holds liquidity from money market funds, government-sponsored companies and banks for short periods of time, paying interest that the Fed recently increased to 0.05%. It also sets a floor below short-term interest rates. Fed Chairman Jerome Powell said the facility was working as expected, keeping the federal funds rate within its range.
Mr. Pozsar, who worked at the New York Fed and the US Treasury before joining Credit Suisse in 2015, is among those who view the growing inflows with concern. For him, they signal a glut of money. Financial firms are willing to take the Fed’s meager interest because they are inundated with money from the central bank’s pandemic stimulus package, which has cut rates so low there are few more places to put it, he said.
Problems are brewing in the pipes passing under Wall Street. And again, the banks call Zoltan Pozsar.
Investors have started storing hundreds of billions of dollars in the Federal Reserve every night, and no one really knows what that means. For answers, many turn to the 42-year-old Hungarian-born Credit Suisse analyst, known for accurately predicting dark market movements like reverse buyouts with statements like, “So sterilization reserves begins. “
Mr. Pozsar’s Global Money Dispatch, published at least twice a week, is the first read for traders, bankers and policymakers interested in the inner workings of the financial system, hailed for its comprehensive view and compelling analysis. The latest hot topic: The nearly trillion dollars piling up in a once obscure and little used Fed program known as the reverse repo mechanism.
The facility holds liquidity from money market funds, government-sponsored companies and banks for short periods of time, paying interest that the Fed recently increased to 0.05%. It also sets a floor below short-term interest rates. Fed Chairman Jerome Powell said the facility was working as expected, keeping the federal funds rate within its range.
Mr. Pozsar, who worked at the New York Fed and the US Treasury before joining Credit Suisse in 2015, is among those who view the growing inflows with concern. For him, they signal a glut of money. Financial firms are willing to take the Fed’s meager interest because they are inundated with money from the central bank’s pandemic stimulus package, which has cut rates so low there are few more places to put it, he said.