Aurelia Butler

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    in Economy

    Fed’s reverse repo drops to lowest in over 3 years

    NEW YORK (Reuters) – The New York Federal Reserve said it accepted $316.246 billion submitted to its overnight reverse repo facility on Monday, the lowest since May 2021.That was down from $338.473 billion on Friday. Analysts said investors may have pulled their money from the reverse repo market and placed cash in the overnight repo market, where banks and financial firms such as hedge funds borrow short-term cash using Treasuries or other debt securities as collateral.”As investors sell off risk assets, they typically move into cash, which generally gets invested in the repo market,” said Scott Skyrm, executive vice president for fixed income and repo at broker-dealer Curvature Securities in New York. Reverse repos, on the other hand, are conducted by the New York Fed’s Open Market Trading Desk and is a key tool to manage short-term rates. In a reverse repo, market participants lend cash to the Fed, usually overnight, at an interest rate of 5.30%, in exchange for Treasuries or other government securities, with a promise to buy them back.Lou Crandall, chief economist at money market research firm Wrightson, said there were likely “increased market funding needs following Friday’s rally (in Treasuries)”, which provided money funds an incentive to place their cash in private repos.The move into repos amid a stocks meltdown, as opposed to the Fed’s reverse repo facility, was likely the reason for some softness in repo rates on Monday, Curvature’s Skyrm said, adding that lower repos could continue all through this week.Still GC repo rates are still higher than those on reverse repos.Data from Curvature Securities showed that the general collateral (GC) repo rate started the financial market session at 5.45%, hitting a low of 5.28% before closing at 5.35% on Monday.The GC rate refers to the level or figure corresponding to a basket of securities that trade normally. GC securities can be substituted for one another without changing the repo rate.In addition, a large rise in the supply of Treasury bills on Tuesday and Thursday, is likely to further drain cash from the RRP facility, analysts said. More

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    in Economy

    US bond rally overdone but Fed should have cut rates in July, BlackRock manager says

    NEW YORK (Reuters) – A recent U.S. Treasuries rally, fueled by expectations of significantly lower interest rates, is overdone as the economy’s resilience may make it unnecessary for the central bank to lower borrowing costs by as much as the market bets, a BlackRock (NYSE:BLK) portfolio manager said.However, the Fed should have started lowering rates last month to gradually shift toward easier monetary policy, he added.U.S. Treasury yields, which move inversely to prices, have declined sharply after weak manufacturing data and employment data released last week sparked recession fears and a sharp repricing of bets on monetary policy for the rest of this year.The rally has made Treasury valuations less attractive, said David Rogal, portfolio manager of BlackRock’s Fundamental Fixed Income Group, in an interview. “We have definitely been more favorable on bonds here but it’s hard to be too constructive at these valuations.”The rally lost some momentum on Monday, but the two-year U.S. Treasury yield remained about 50 basis points lower than a week earlier, and the benchmark 10-year yield has shed 40 basis points over the past week. On Monday, investors were betting on about 114 basis points in rate cuts for 2024, nearly double the easing expected last week.The Fed is still expected to start easing at its next meeting in September.Further Treasury price advances would reflect a rapid weakening of economic growth. However, if the Fed lowers interest rates, Rogal said, he would expect a so-called economic soft landing, a scenario in which inflation decreases without a major slowdown.Still, he said the central bank should have started cutting rates by 25 basis points at the end of its meeting last week, when it kept policy rates unchanged at 5.25%-5.5%.”Some of what the markets are reacting to is a Fed that now looks a little bit more behind the curve,” said Rogal. This increases the chances of a bigger, 50 basis point cut in September that could seem “a little panicky.” More

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    in Economy

    Fed’s Daly: more confident inflation is on path to 2%

    “It’s clear inflation is coming down closer to our target. It’s clear that the labor market is slowing and it’s to a point where we have to balance those goals,” Daly said at an event in Hawaii.And while the Fed has so far left its policy rate unchanged, its recent shift in its communications to acknowledge the risks to its two goals are in balance is in itself a policy adjustment, she said. More

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    in Cryptocurrency

    ‘Not Selling Anything’: Economist Raoul Pal Shares Drop of Optimism

    The markets have already entered the “max fear” zone, he admitted. In just one week, the Crypto Fear and Greed Index plummeted from 74/100 to today’s level of 26/100, which is an upper level for the “Fear” zone.As such, during periods like this, it is essential to hold on and zoom out. In some regards, what is happening today is natural for bullish phases of crypto markets, the economist says:At the end of the day, this dump being nothing but “nasty flush out” looks probabilistic to Pal. Today, in the early morning hours, the Bitcoin (BTC) price dumped below $49,500 to the lowest since amid-February. The aggregated amount of liquidations exceeded $1.22 billion in equivalent.Instead, a proper trader should focus on his/her basket with 3-5 assets maximum, while a “degen” (high-risk) allocation should be reduced to 10%.Then, as the possibility of attacks surges, Pal recommends only using self-custody or even multi-signature on-chain wallets for operations with cryptocurrency.Instead of trying to outsmart the market by “catching the knives,” the economist recommends considering a HODL strategy. Personally, he announced that he is not selling anyting and says that adding to long-term holdings might be a smart bet amid the dip.This article was originally published on U.Today More

  • 125 Shares179 Views

    in Cryptocurrency

    Jim Cramer Sparks Crypto Community Reaction With Gold Crypto Tweet

    In an X post made a few hours back, Cramer wrote, “Remember this: gold held up a lot better than crypto.” This statement quickly garnered reactions from the crypto community, with many interpreting it as a potential bottoming signal for the cryptocurrency market.Cramer’s tweet comes as the cryptocurrency market is experiencing increased volatility. Cryptocurrencies fell on Monday amid a global market sell-off triggered by recession fears.Bitcoin fell to $49,050 at one point, its lowest level and the first time below $50,000 since February, after trading around $70,000 a week earlier.The developments reflect a broader market sell-off that began last week, when a weaker-than-expected July jobs report fueled investor concerns about a recession. Bitcoin has dropped over 18% since Saturday.Ethereum’s losses were significantly greater. The cryptocurrency asset fell 17% to $2,259, extending its three-day loss to 24% and wiping out its 2024 gain. The Nasdaq Composite has undergone a decline; Japanese stocks entered a bear market Monday after falling more than 12% overnight, the largest one-day drop since 1987.A look at the comments under Cramer’s post indicated that some interpreted Cramer’s comment as a potential bottoming signal for the crypto market, suggesting that the worst of the downturn might be over.Some also held it as a contrarian indicator, believing that when mainstream financial commentators express skepticism, it could signal a buying opportunity.Cramer’s recent comment to some was seen as a market bottom and potential rebound.This article was originally published on U.Today More

  • 138 Shares149 Views

    in Cryptocurrency

    Binance CEO Breaks Silence on How Long Bear Market Will Continue

    In the midst of extreme fear, uncertainty and doubt, the attention of crypto market participants turned to the most prominent figures of the space. Richard Teng, the CEO of Binance, the world’s largest crypto exchange, is one of those whose words are worth listening to.Among the noteworthy things that the Binance chief said is that the latest crash in both the crypto and stock market is down to macroeconomic factors, but he does not think they are a sign of a long-term negative trend. However, it is not over as the Federal Reserve cutting rates and geopolitical issues could lead to more market swings, warns Teng. Despite an extremely negative conjecture, the Binance CEO told crypto enthusiasts to stay up to date and keep building despite the current challenges.The price of BTC, meanwhile, has rebounded to around the $51,500 level after some relief. It is still unclear what the future holds for the market, and what will happen next is an open question, but if you want to try and take a side, Teng’s seems to be the most optimistic.This article was originally published on U.Today More

  • 113 Shares189 Views

    in Cryptocurrency

    Why Crypto’s Down Today: Reasons Shared by Seasoned Expert

    In terms of macro economics, the unwinding of Japanese yen might also have contributed to the plummeting of crypto prices. As covered by U.Today previously, the asset added an unbelievable 10% in less than 30 days in tandem with the U.S. dollar.At the same time, the Nikkei Stock Average 225, an index of the largest Japanese companies stocks, witnessed its worst drop since 1987 Black Monday.Then, the pessimism of investors was triggered by the publication of alarming unemployment rates in the U.S. The unemployment rate surged to 4.3% in July, up 0.2% from June, per Friday’s BLS report.Accelerated recession fears take over the market as the heated debate rages about the necessity of emergency U.S. Fed rate cuts in August or September.However, the “crypto-native” bearish catalysts also did their job. The overall effect of Mt. Gox compensation distribution is yet to be seen while major trading firm Jump Crypto might be selling its positions.Also, a mysterious Solana whale yielded $120 million in SOL from various validators and sent the coins to Coinbase (NASDAQ:COIN) Prime, Colin Wu says.As such, the market is in the middle of its most painful drawback in months. A total of $1.2 billion in crypto positions, the highest from mid-April, were liquidated in last 24 hours; 85% of them were longs.The largest single liquidation was registered on Huobi: a trader saw his $27 million Bitcoin (BTC) long position erased today, according to CoinGlass data.This article was originally published on U.Today More