Dollars and Jens
Tuesday, December 16, 2008
Term lending facility
I'm going to note the 28-day term lending auction the Fed held, which resulted in a 28bp borrowing rate, which was the minimum permissible bid; the bid-to-cover ratio was .42, i.e. well below 1. The effective fed funds rate has been in the low teens lately, in spite of the supposed target of 100bp. This is worth remembering when the FOMC lowers the target later today; that "target" has been For Entertainment Purposes Only for the past couple months.

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