Credit Suisse’s #Zoltan Warns of Trouble Ahead in Money Markets
Investors have started storing hundreds of billions of dollars at the Federal Reserve each night, and no one is quite sure what it means. For answers, many turn to the 42-year-old, Hungarian-born Credit Suisse analyst known for accurately predicting the movements of arcane markets like reverse repurchases with pronouncements including, “So the sterilization of reserves begins.”
Mr. Pozsar’s Global Money Dispatch, published at least twice a week, is the first read for traders, bankers and policy makers interested in the financial system’s inner workings, praised for its comprehensive view and cogent analysis. The latest hot topic: the near-trillion dollars piling up in a once-obscure and little-used Fed program known as the reverse repurchase facility.
The facility holds cash from money-market funds, government-sponsored companies and banks for short periods, paying interest the Fed recently raised to 0.05%. It also helps set a floor under short-term interest rates. Fed Chairman Jerome Powell has said the facility is working as designed, keeping the federal-funds rate within its range.
