CategoryInvestment Banking

The Fed announced a 50-basis point rate cut in September 2024. What does this mean? How is it done? Why was it done? What are the future implications? How should we think about this with regards to investing? These are the questions I aim to answer, perhaps controversially, in this article. Disclaimer: I have no idea what I’m talking about, and you should most definitely NOT make a financial or...

This is Part 3, the final part, in my series on the Fed. Review In Part 1, we discussed the Fed’s massive financial intervention into the mortgage-backed security market during the 2008+ recession. During this time, the Fed pumped ~22% of a single-year’s GDP into the market, spread across six years. Keep this figure in the back of your mind because we’ll revisit this enormous, unprecedented slug...

This is Part 2 of my three-part series on the Federal Reserve. Review In Part 1, I discussed the Fed’s massive financial intervention into the mortgage-backed security market during the last recession (2008+). This event provides a good benchmark to compare subsequent Fed interventions, notably 2020. I also analyzed the outcomes of the Fed’s mortgage-backed security purchases. Although I expected...

The Federal Reserve plays an ever-increasing, complex role in the U.S. economy. By significantly expanding its scope, the Fed is now the single most important economic factor influencing the financial markets. The Federal Reserve is, no doubt, a complex topic, perhaps one of the most challenging areas within finance. Few people know the Fed’s mandates. Fewer still understand how the Fed executes...