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- IsityjIsityj
  ·2021-05-28
  Interesting
  Half a Trillion Dollars Is Sitting at the Fed Earning Nothing
  (Bloomberg) -- There’s so much spare cash sloshing around U.S. funding markets that investors are ch
  Half a Trillion Dollars Is Sitting at the Fed Earning Nothing
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- IsityjIsityj
  ·2021-05-27
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- IsityjIsityj
  ·2021-05-27
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  BANKS ‘A small step’: Wall Street lukewarm on HSBC’s U.S. retail exit
  LONDON —HSBC on Wednesday announced it wouldexit its loss-making U.S. retail banking operations, a m
  BANKS ‘A small step’: Wall Street lukewarm on HSBC’s U.S. retail exit
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  ·2021-05-27
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  ·2021-05-27
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And with the forces driving the dollar glut still some way from abating, that figure could climb further, adding fuel to an increasingly complex debate about what the Fed should do with its various tools to keep a rein on policy.</p><p>While the offering rate on the Fed reverse repo facility is 0%, there is a lack of alternative places to safely stash money for very short periods. On top of that, some of those -- like Treasury bills and market-based repurchase agreements -- have seen their rates fall at times to negative levels, meaning investors are essentially paying for the privilege of putting their money somewhere. Compared to that, 0% doesn’t seem so bad.</p><p>The RRP facility, as it’s commonly called, is “the only safety valve” for the pressure that’s been building up in money markets, according to Gennadiy Goldberg, a senior rates strategist at TD Securities in New York. “It’s really just holding back the flood of cash coming.”</p><p>Taper Talk</p><p>The massive buildup of dollars in the funding market is in part related to the Fed’s huge monthly bond-buying program, and is therefore providing fodder for the debate about just when and how quickly the Federal Reserve ought to begin dialing back its asset purchases. But the connection between the purchases and short-end dislocations is not straightforward. Many observers doubt that this as an issue that will substantially move the Fed’s position on tapering, and it is the prospects of sustained inflation and interest-rate hikes that are seen as the key drivers of that discussion.</p><p>“I don’t think tapering is going to solve this,” said Subadra Rajappa, a strategist at Societe Generale SA. “Tapering is only going to add to the confusion. If they taper asset purchases, it’s going to roil global markets.”</p><p>The enormous amount of fiscal stimulus being pumped into the economy is also playing a role in the glut, as is the need for the Treasury to curtail the amount of money it has on hand so it can meet a looming legal requirement on cash levels that is linked to the reinstatement of the federal debt ceiling.</p><p>Nowhere to Go</p><p>This drawdown in the Treasury general account is not only boosting the amount of cash reserves in the system in search of a home, but the speed at which it’s happening also means there are fewer instruments for short-end investors to buy. That’s because one of the easiest ways to reduce the cash balance is to not issue as many Treasury bills -- the government’s shortest-term instruments -- when the old ones mature.</p><p>Simply putting the cash to work in a bank account is also not a ready solution, with regulatory constraints spurring some banks to turn away deposits, which instead flow toward money-market funds and feed the abundance.</p><p>Usage of the Fed’s RRP facility has now exceeded levels typically only seen at key dates in the funding calendar -- even though the current period is not typically a major crunch point. The previous record volume of $474.6 billion took place on Dec. 31, 2015, while the next biggest day was also on the final day of a year. Month-and quarter-end periods have also been known to show some signs of stress, so it’s a distinct possibility that usage will climb again on Friday, the final trading day of this month, although many observers doubt that it will stop there. Results of the next operation are set to be published around 1:15 p.m. Friday afternoon New York time.</p><p>Relieving Pressure</p><p>Indeed, some argue that the facility is doing exactly what it’s supposed to, and that is why the Fed recently increased the amount of business that each organization can do with it, as well as the accessibility of it to new counterparties.</p><p>By providing a venue for funds, the Fed is relieving some of the downward pressure on front-end rates if everyone had to go into repo or T-bills. And that in turn enables them to keep their key benchmark, the effective fed funds rate, within its goalposts.</p><p>That rate is currently hovering around 0.06%, in the lower end of the Fed’s zero to 0.25% target range, but still acceptable to officials. 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But so long as the front-end remains in check, the Fed also has the option of standing pat.</p><p>SocGen’s Rajappa doesn’t see a catalyst for them to shift IOER or RRP rates and said that even if the Fed did tweak them “there will still be demand for the reverse repo facility.”</p>","source":"lsy1612507957220","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Half a Trillion Dollars Is Sitting at the Fed Earning Nothing</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nHalf a Trillion Dollars Is Sitting at the Fed Earning Nothing\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-05-28 19:44 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/half-trillion-dollars-sitting-fed-213955871.html><strong>Bloomberg</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>(Bloomberg) -- There’s so much spare cash sloshing around U.S. funding markets that investors are choosing to park almost half a trillion dollars at the central bank -- earning absolutely nothing....</p>\n\n<a href=\"https://finance.yahoo.com/news/half-trillion-dollars-sitting-fed-213955871.html\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{},"source_url":"https://finance.yahoo.com/news/half-trillion-dollars-sitting-fed-213955871.html","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1136464317","content_text":"(Bloomberg) -- There’s so much spare cash sloshing around U.S. funding markets that investors are choosing to park almost half a trillion dollars at the central bank -- earning absolutely nothing.Usage of the Federal Reserve’s reverse repo facility -- a mechanism that’s part of the central bank’s arsenal for helping to steer short-term interest rates -- surged on Thursday to an unprecedented $485.3 billion. And with the forces driving the dollar glut still some way from abating, that figure could climb further, adding fuel to an increasingly complex debate about what the Fed should do with its various tools to keep a rein on policy.While the offering rate on the Fed reverse repo facility is 0%, there is a lack of alternative places to safely stash money for very short periods. On top of that, some of those -- like Treasury bills and market-based repurchase agreements -- have seen their rates fall at times to negative levels, meaning investors are essentially paying for the privilege of putting their money somewhere. Compared to that, 0% doesn’t seem so bad.The RRP facility, as it’s commonly called, is “the only safety valve” for the pressure that’s been building up in money markets, according to Gennadiy Goldberg, a senior rates strategist at TD Securities in New York. “It’s really just holding back the flood of cash coming.”Taper TalkThe massive buildup of dollars in the funding market is in part related to the Fed’s huge monthly bond-buying program, and is therefore providing fodder for the debate about just when and how quickly the Federal Reserve ought to begin dialing back its asset purchases. But the connection between the purchases and short-end dislocations is not straightforward. Many observers doubt that this as an issue that will substantially move the Fed’s position on tapering, and it is the prospects of sustained inflation and interest-rate hikes that are seen as the key drivers of that discussion.“I don’t think tapering is going to solve this,” said Subadra Rajappa, a strategist at Societe Generale SA. “Tapering is only going to add to the confusion. If they taper asset purchases, it’s going to roil global markets.”The enormous amount of fiscal stimulus being pumped into the economy is also playing a role in the glut, as is the need for the Treasury to curtail the amount of money it has on hand so it can meet a looming legal requirement on cash levels that is linked to the reinstatement of the federal debt ceiling.Nowhere to GoThis drawdown in the Treasury general account is not only boosting the amount of cash reserves in the system in search of a home, but the speed at which it’s happening also means there are fewer instruments for short-end investors to buy. That’s because one of the easiest ways to reduce the cash balance is to not issue as many Treasury bills -- the government’s shortest-term instruments -- when the old ones mature.Simply putting the cash to work in a bank account is also not a ready solution, with regulatory constraints spurring some banks to turn away deposits, which instead flow toward money-market funds and feed the abundance.Usage of the Fed’s RRP facility has now exceeded levels typically only seen at key dates in the funding calendar -- even though the current period is not typically a major crunch point. The previous record volume of $474.6 billion took place on Dec. 31, 2015, while the next biggest day was also on the final day of a year. Month-and quarter-end periods have also been known to show some signs of stress, so it’s a distinct possibility that usage will climb again on Friday, the final trading day of this month, although many observers doubt that it will stop there. Results of the next operation are set to be published around 1:15 p.m. Friday afternoon New York time.Relieving PressureIndeed, some argue that the facility is doing exactly what it’s supposed to, and that is why the Fed recently increased the amount of business that each organization can do with it, as well as the accessibility of it to new counterparties.By providing a venue for funds, the Fed is relieving some of the downward pressure on front-end rates if everyone had to go into repo or T-bills. And that in turn enables them to keep their key benchmark, the effective fed funds rate, within its goalposts.That rate is currently hovering around 0.06%, in the lower end of the Fed’s zero to 0.25% target range, but still acceptable to officials. A decline in other market-based front-end rates could once again bring to the fore talk of changes to so-called administered rates, the different levels that the Fed sets for excess reserve holdings and the RRP facility. But so long as the front-end remains in check, the Fed also has the option of standing pat.SocGen’s Rajappa doesn’t see a catalyst for them to shift IOER or RRP rates and said that even if the Fed did tweak them “there will still be demand for the reverse repo facility.”","news_type":1},"isVote":1,"tweetType":1,"viewCount":323,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":135928631,"gmtCreate":1622127043123,"gmtModify":1704180015145,"author":{"id":"3582086608896606","authorId":"3582086608896606","name":"Isityj","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582086608896606","authorIdStr":"3582086608896606"},"themes":[],"htmlText":"Pls like and comment!","listText":"Pls like and comment!","text":"Pls like and comment!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":2,"commentSize":2,"repostSize":0,"link":"https://ttm.financial/post/135928631","repostId":"1166192216","repostType":4,"isVote":1,"tweetType":1,"viewCount":407,"authorTweetTopStatus":1,"verified":2,"comments":[{"author":{"id":"3567900703076956","authorId":"3567900703076956","name":"xj_00","avatar":"https://static.tigerbbs.com/cc9c90a2ce72e48dc566702414b3f278","crmLevel":2,"crmLevelSwitch":0,"idStr":"3567900703076956","authorIdStr":"3567900703076956"},"content":"Like comments too thks","text":"Like comments too thks","html":"Like comments too thks"}],"imageCount":0,"langContent":"EN","totalScore":0},{"id":135921564,"gmtCreate":1622126968458,"gmtModify":1704180014333,"author":{"id":"3582086608896606","authorId":"3582086608896606","name":"Isityj","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582086608896606","authorIdStr":"3582086608896606"},"themes":[],"htmlText":"Hi","listText":"Hi","text":"Hi","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135921564","repostId":"1166192216","repostType":4,"repost":{"id":"1166192216","kind":"news","pubTimestamp":1622125174,"share":"https://ttm.financial/m/news/1166192216?lang=&edition=fundamental","pubTime":"2021-05-27 22:19","market":"us","language":"en","title":"BANKS ‘A small step’: Wall Street lukewarm on HSBC’s U.S. retail exit","url":"https://stock-news.laohu8.com/highlight/detail?id=1166192216","media":"cnbc","summary":"LONDON —HSBC on Wednesday announced it wouldexit its loss-making U.S. retail banking operations, a m","content":"<div>\n<p>LONDON —HSBC on Wednesday announced it wouldexit its loss-making U.S. retail banking operations, a move that is being met with tepid applause by Wall Street analysts.Europe’s largest bank in terms of ...</p>\n\n<a href=\"https://www.cnbc.com/2021/05/27/a-small-step-wall-street-lukewarm-on-hsbcs-us-retail-exit.html\">Web Link</a>\n\n</div>\n","source":"cnbc_highlight","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>BANKS ‘A small step’: Wall Street lukewarm on HSBC’s U.S. retail exit</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; 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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBANKS ‘A small step’: Wall Street lukewarm on HSBC’s U.S. retail exit\n</h2>\n\n<h4 class=\"meta\">\n\n\n2021-05-27 22:19 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.cnbc.com/2021/05/27/a-small-step-wall-street-lukewarm-on-hsbcs-us-retail-exit.html><strong>cnbc</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>LONDON —HSBC on Wednesday announced it wouldexit its loss-making U.S. retail banking operations, a move that is being met with tepid applause by Wall Street analysts.Europe’s largest bank in terms of ...</p>\n\n<a href=\"https://www.cnbc.com/2021/05/27/a-small-step-wall-street-lukewarm-on-hsbcs-us-retail-exit.html\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"HSBC":"汇丰"},"source_url":"https://www.cnbc.com/2021/05/27/a-small-step-wall-street-lukewarm-on-hsbcs-us-retail-exit.html","is_english":true,"share_image_url":"https://static.laohu8.com/72bb72e1b84c09fca865c6dcb1bbcd16","article_id":"1166192216","content_text":"LONDON —HSBC on Wednesday announced it wouldexit its loss-making U.S. retail banking operations, a move that is being met with tepid applause by Wall Street analysts.Europe’s largest bank in terms of assets will sell off some parts of its mass-market business and wind down others as it looks to shift attention to its largest market — Asia.In a note Thursday,Goldman Sachsbanking analysts reiterated that HSBC's lack of scale in U.S. retail banking was the main reason for its low profitability and high cost-to-income ratio stateside.\"Thus, we see the announced measures as a positive, as they represent a small step towards HSBC potentially becoming a more focused, simpler and more profitable group,\" analysts Martin Leitgeb, Andreas Scheriau and Gurpreet Singh Sahi said.Having struggled against the big domestic players in the U.S. and some parts of Europe, the British lender has been seeking an exit from its less profitable operations for some time.Although letting go of most individual and small business clients, HSBC will maintain a small physical presence in the U.S. to serve its wealthiest international clients.The group will exit 90 of its 148 branches, pertaining a small network of 20-25 physical locations which will be recalibrated as international wealth centers, with the remaining branches to be closed.Goldman analysts noted that while the financial impacts arising from the transactions are immaterial in the wider group context and no additional details have yet been given on the profitability of U.S. wealth and personal banking operations post-exit, the outlook is more positive.\"We see scope for improved profitability, as the branch footprint will have been reduced by over 80%, whilst loans will only be down 13% (all else equal),\" they said, continuing with a \"buy\" rating on HSBC shares.The main downside risks Goldman highlighted included weaker macro trends such as pandemic setbacks, limited progress on the bank's restructuring, escalating geopolitical tensions, increased competition and \"delays in optimising capital efficiencies within the group.\"Citizens Bank and Cathay Bank, subsidiaries of Citizens Financial Group and Cathay General Corp., have agreed to buy HSBC's businesses on the east and west coasts, respectively.The deal would see a majority of HSBC's 850,000 client relationships sold, primarily customers with balances below $75,000, butBank of Americanoted that a 2% deposit premium on the sale is \"low compared with industry averages, reflecting the high cost structure of the operations.\"\"The remaining customers are small in number but the dominant part of U.S. retail deposit balances. The retained customer base is internationally active or aligned with HSBC's wealth management ambitions,\" BofA banking analysts Alastair Ryan and Rohith Chandra-Rajan said in a note Thursday.","news_type":1},"isVote":1,"tweetType":1,"viewCount":195,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":135921866,"gmtCreate":1622126957855,"gmtModify":1704180014010,"author":{"id":"3582086608896606","authorId":"3582086608896606","name":"Isityj","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582086608896606","authorIdStr":"3582086608896606"},"themes":[],"htmlText":"Commented","listText":"Commented","text":"Commented","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135921866","repostId":"1166192216","repostType":4,"isVote":1,"tweetType":1,"viewCount":272,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0},{"id":135921021,"gmtCreate":1622126939263,"gmtModify":1704180013847,"author":{"id":"3582086608896606","authorId":"3582086608896606","name":"Isityj","avatar":"https://static.laohu8.com/default-avatar.jpg","crmLevel":1,"crmLevelSwitch":0,"followedFlag":false,"idStr":"3582086608896606","authorIdStr":"3582086608896606"},"themes":[],"htmlText":"Cool","listText":"Cool","text":"Cool","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/135921021","repostId":"1166192216","repostType":4,"isVote":1,"tweetType":1,"viewCount":308,"authorTweetTopStatus":1,"verified":2,"comments":[],"imageCount":0,"langContent":"EN","totalScore":0}],"defaultTab":"following","isTTM":true}