This week’s Fed action comes at an unusually messy time for the underground financial plumbing.

The Federal Reserve Open Market Committee today reduced their target for overnight interest rates by another 25bps to a range of 1.75% to 2.00%, marking the second rate cut at a consecutive meeting in what—if you buy into Powell’s off the cuff comment last time—could be either a mid-cycle adjustment or a series of cuts into economic slowing In addition, the Fed “tweaked” IOER, cutting it by 30bps to smooth funding market functioning, though that’s papering over a gaping hole.

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Guy LeBas

Director, Custom Fixed Income Solutions

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