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Crescenzi: Where's the Fed?

There's a chance the central bank is thinking about adding money to the system.

Editor's note: This column originally appeared on RealMoney at 9:30 a.m. EDT.

The federal funds rate is trading at 3.75% this morning, well above the Fed's 2% target.

Typically, when the funds rate is above the Fed's target rate, the Fed adds money into the banking system. The inaction creates suspicion about whether the Fed is preparing to announce an interest rate cut.

Perhaps the Fed is waiting for the dust to settle on the many position unwindings that are taking place this morning before making a judgment about the need for money in the banking system. Alternatively, the Fed is engaged in a conference call to discuss any actions to take.

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

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, 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, a popular Web site covering the bond market and the economy. Crescenzi appreciates your feedback;

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