The Fed did not inject additional money into the banking system during its normal operating period, which occurs at around 9:40 a.m. each day, probably because the Fed's special operation of $19 billion announced earlier this morning has had early success in bringing the fed funds rate close to the Fed's 5.25% target.
The market appears to be priced for about 20% odds of an intermeeting cut, and earlier was fully priced for a cut occurring by the Sept. 18 FOMC meeting.
Please see the table below.
P.S. Will you be there when Cramer makes his next move?
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Tony Crescenzi Blog Watch Fed Funds, LIBOR Friday 8/9/2007 3:29 PM EDT The fed funds rate action from morning to afternoon provides some liquidity clues.
Tony Crescenzi Blog Watching the CP Market 8/9/2007 2:19 PM EDT There have been a few strains in it recently.
Tony Crescenzi Blog The ECB's Extraordinary Action 8/9/2007 10:08 AM EDT Either the Fed erred Tuesday, or it and the ECB are more in the dark than investors.
Tony Crescenzi is the chief bond market strategist at Miller Tabak + Co., LLC, and advises many of the nation's top institutional investors on issues related to the bond market, the economy and other macro-related issues. At the request of the Federal Reserve, Crescenzi is a regular participant in the board's Livingston Survey of economic forecasters. He is also the author of the revised investment classic, The Money Market,
first published in 1978 by Marcia Stigum, and The Strategic Bond Investor. At the time of publication, Crescenzi or Miller Tabak had no positions in the securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Crescenzi also is the founder of Bondtalk.com, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback; click here to send him an email.
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