Decodinng Kevin Warsh
Twice a year the chair of the Federal Reserve testifies before Congress on monetary policy. It’s a requirement that stems from 1978 legislation that provides accountability and oversight of the independent central bank. This week’s sessions provided some insights into principal elements of monetary policy that are not ordinarily in the rate-setting headlines that monopolize […]
Banks Have Changed Their Business Model and Public Funds Investors Are Implicated
There was a time when banks seemed to dominate the public funds investment world. For the thousands of small and mid-sized local governments they were the go-to source of investment income. When a city, town or school district had money to invest, they sought bids from banks, placed the funds with the one offering the […]
Halftime: What’s in Store for the Balance of 2026?
Last week’s Crane Money Fund Symposium brought together portfolio managers who invest assets in the $8 trillion money market fund industry along with those who invest portfolios for the major banks. It’s a small number of people whose views on the economy and investment markets are incredibly important in setting the course for short-term […]
Transparency: The Fed’s Mandate
Federal Reserve Chair Kevin Warsh’s post Federal Open Committee meeting news conference got me thinking about how much information transparency has shaped the financial markets since I entered the business nearly 50 years ago, and the implications if the Fed moves to reduce transparency and access to information by ordinary investors, including those who manage […]
Why the Director of National intelligence is Involved in the Federal Agency Market
It may not be immediately apparent, but President Trump’s naming Bill Pulte Interim Director of National Intelligence has implications for the Federal agency market where $450 billion of public funds are invested. Before you dismiss this as crackpot, consider: Pulte is also the head of the Federal Housing Finance Agency and chairman of both Fannie […]
An Update on Credit
In November we wrote about cracks appearing in credit, cautioning investors that emerging risks could expose corporate bonds and commercial paper to losses and drag down returns of portfolios that hold them. Six months later the cracks have not expanded. Nor have they healed. But risk premiums for both investment grade and high yield credit […]
Ya Wanna Bet? The Rising Place of Prediction Markets in Investing
Would you go to a betting parlor to invest? Before you answer, consider: Betting on predictions and investing have a lot in common. Investors regularly use the vernacular of betting to describe market activities. We make “bets” on relative value, the future direction of interest rates and the likelihood that an investment we make might […]
Why Five Percent Yield on the 30 Year Treasury is a Big Deal
The yield on the 30-year Treasury bond broke above five percent this week, and it’s kind of a big deal. It’s not that five percent triggered some pre-set realignment in the financial markets, or that the level resulted in a quantum change in gains, losses or winning and losing positions as compared with those positions […]
Sometimes No News Is News
The numbers are staggering. Last year Treasury issued $30.5 trillion of securities to fund the national debt. That’s nearly $600 billion a week. This year, through April issuance was $10.8 trillion, 10% ahead of the 2025 pace. Most of this is to refund/rollover existing debt but some is for new debt that will be required […]
Beyond the Fed: Why This Week’s Events May Be Less important than You Think
I’m guilty of having spent a good deal of time over the last two weeks on the eye-catching news on interest rates: the Senate hearing on whether to confirm Kevin Wash as the next chair of the Federal Reserve, the move by the Department of Justice to end a criminal probe of Jerome Powell, […]