Author Topic: The Fed Is Paying 0.00%. Such a Deal! Depositors Are Flocking - Bloomberg  (Read 251 times)

rcjordan

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ergophobe

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I was going to ask for the dummies explanation of why anyone would do this, but the article gives a good explanation

Quote
The quick explanation for this is that thereís a lot of money sloshing around the financial system, and for regulatory reasons banks donít want to take it in as deposits. So money market mutual funds are absorbing the money. Each night they place some of their assets with the Fed and earn nothing, which is bad for their profitability. As for the Fed, the reason it even offers the facility is that otherwise the forces of supply and demand might push the federal funds rate below zero, which it has vowed not to let happen.

rcjordan

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Dimon: JPMorgan is sitting on about $500 million in cash, waiting to invest in higher rates - MarketWatch

https://www.marketwatch.com/story/dimon-jpmorgan-is-sitting-on-about-500-million-in-cash-waiting-to-invest-in-higher-rates-11623700397

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Jamie Dimon: JPMorgan is hoarding cash because 'very good chance' inflation here to stay

https://www.cnbc.com/2021/06/14/jamie-dimon-jpmorgan-is-hoarding-cash-because-very-good-chance-inflation-here-to-stay.html