The Federal Reserve is starting to create a floor for money-market rates with a tool that may be pivotal to the central bank’s eventual siphoning of the unprecedented liquidity added to the U.S. banking system.
Federal Reserve Governor Daniel Tarullo urged regulators to set market-wide minimums for safety margins on loans backed by securities and favored high capital requirements for banks that rely heavily on non-deposit funding.
The Federal Reserve will have a relatively small holding of Treasury securities even after its second round of bond buying concludes, according to Carl Lantz , Credit Suisse AG’s head of U.S. interest-rate strategy.
Treasuries fell for the first time in three weeks, pushing 10-year note yields to a two-year high, on speculation economic growth has improved enough to make the Federal Reserve comfortable slowing bond purchases this month.
Treasuries gained, pushing 10-year note yields to almost a seven-week low, after a report by ADP Research Institute showed companies in the U.S. hired fewer workers than forecast in September, boosting demand for refuge.
Carl Lantz, head of interest-rate strategy at the primary dealer Credit Suisse Group AG, says the 30 year mortgage rate should "drift to" three and 5/8%. Lantz talks with Bloomberg's Ken Prewitt and Tom Keene on Bloomberg Radio's "Bloomberg Surveillance."
When the housing bubble burst in 2006, U.S. policy makers looked to Japan for clues about what to do -- and not do -- in response. Now their attention is shifting to Europe as America gets set to follow that region with a concerted attack on its budget deficit.