Plumbing Notes: The Peak-TACO Era
The piece declares that markets have entered a "Peak‑TACO" phase after a series of quasi‑ceasefires, with risk assets beginning to decouple from rate markets. Z6 futures for December 2026 reflect a modest de‑escalation timeline, suggesting investors price a realistic end‑of‑year resolution. Ongoing tensions in the Strait of Hormuz keep commodity premiums high, while U.S. actions in the Middle East have failed to achieve strategic goals. The analysis warns that further escalation remains possible, but current pricing already incorporates a partial retreat.
Plumbing Notes: Nothing Ever Happens
Money‑market volatility has markedly subsided, pushing overnight repo rates to near‑record lows and stabilising the SOFR‑FF basis. Higher inter‑bank volumes are keeping the basis narrow while swap spreads have widened, signalling easier funding conditions. The Federal Reserve’s aggressive volatility suppression...
The Fed's New Target: Part II
In Part II, the podcast examines how the ongoing "Great Compression" of money‑market rates is pushing the Federal Reserve to replace its traditional overnight Fed Funds target with a new benchmark. It explains that overnight Fed Funds volume has collapsed...
Infographics: Key Rates & Spreads In the Modern Repo Market
The episode breaks down the modern repo market by illustrating how overnight rates and dealer spreads vary across different repo segments—triparty, GCF, DVP, and NCCBR. It explains that dealers profit by maintaining a positive spread between the cost of borrowing...
Plumbing Notes: A Global Compression
In this brief update, the host explains how the Federal Reserve’s recent liquidity injections have compressed the SOFR‑FF basis, pushing overnight SOFR rates to just a few basis points below the interest on reserve balances (IORB). Major banks, led by...