Last week some $75 million of “fed funds” (that is, interbank overnight credit) was transacted at a rate of 15%, and “a bunch” went through in the low to mid 7s.
No, I didn’t mistype that. You can find the actual data at this link.
Originally I, and everyone else, assumed that the “high” was an error. A bad print. That there was no chance this was “real”.
It was.
What exactly is “a bunch”.
The MOST that could have been transacted at 15% would be about 2% of the daily volume. I see no indication of a “bunch”
The low was 4.65 and the volume weighted average was 4.86.
The high was 15. Using a little algebra would tell us that the maximum possible amount transacted at 15% would be about 2% of the daily volume. And that’s the maximum amount.
Is that a bunch ? Less than 2% of a single day’s volume ?
Let’s look into the facts before sounding the alarms.
