JPMorgan CEO Jamie Dimon publicly declared he would not buy long-dated U.S. government bonds. In this Wall Street Truthbomb, Mark Malek explains why interest on the national debt officially passed Med
Sorry, but a technical correction. You are right in "normal" times (to be debated what constitutes normal), the Fed "influences" the short-term rates. Not true in less "normal" times.
The Federal Open Market Committee (FOMC) sets a target range for the federal funds rate, the overnight rate at which banks lend reserves to each other. It does not directly set every market rate by decree. Instead, it uses administered rates it does control:
Interest on reserve balances (IORB)
The overnight reverse repurchase agreement (ON RRP) facility rate
The discount rate / standing repo facility (as a ceiling)
These create a corridor that keeps the effective federal funds rate inside the target range under the current ample-reserves regime. The New York Fed and Board of Governors explicitly describe this as the primary way the Fed steers short-term money market rates.
Because T-bills, commercial paper, repo rates (SOFR, TGCR, etc.), and other short-term instruments are close substitutes for federal funds, their yields track the fed funds target very tightly. When the Fed raises or lowers its target, short-term Treasury yields move with it in near lockstep under normal conditions. Markets cle
Thinking the debt doesn't matter doesn't understand exponential growth. The debt service will become unsustainable. There's no intention to ever pay it back. Why should the average person pay debt back? Eat, drink and be merry, then file bankruptcy. Rinse and repeat.
You also left out that the US has to refinance approximately 10 trillion from effectively 0% to 5%, which adds half a trillion to the interest bill each year on existing debt, much less any new debt we incur. Also, central banks have walked away, so Treasuries have to compete more with private debt, which is increasingly in demand. So, who are the adults in the room who are going to fix this? I feel a Marriner Eccles moment coming. I am reminded of the famous last words: "The pound in your pocket has not been devalued..." LOL
Ireally appreciate this insightful video thank you. I need support getting started with trading, For someone with less than €10,000 to invest, How would you recommend we enter the market.
Its not a debt spike, its 27 years in the making. Its a mountain, and its not founded in a single event like a depression or a war, its simply the net result for a country whose rich cant get enough and are running it into the ground. As long as wealth buys power, democracies will always end this way.
I wish you would have discussed how the bond market would 'fix' the problem and what Diamon was proposing to do to forestall the crisis. This is the most important part of the story that you left out. For example, is another QE on the way? The only fix right now, considering that the government cannot afford the current borrowing cost is government intervention of some sort.
I have an uncle named Sam. He had personal issues and had been spending money like a drunken sailor. I’m not going to lend any money to him.
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The Federal Open Market Committee (FOMC) sets a target range for the federal funds rate, the overnight rate at which banks lend reserves to each other. It does not directly set every market rate by decree. Instead, it uses administered rates it does control:
Interest on reserve balances (IORB)
The overnight reverse repurchase agreement (ON RRP) facility rate
The discount rate / standing repo facility (as a ceiling)
These create a corridor that keeps the effective federal funds rate inside the target range under the current ample-reserves regime. The New York Fed and Board of Governors explicitly describe this as the primary way the Fed steers short-term money market rates.
Because T-bills, commercial paper, repo rates (SOFR, TGCR, etc.), and other short-term instruments are close substitutes for federal funds, their yields track the fed funds target very tightly. When the Fed raises or lowers its target, short-term Treasury yields move with it in near lockstep under normal conditions. Markets cle
Wow. Dimon?!!