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Wrightson ICAP: Happy To Be Wrong On Administered Rate Hike Size

FED

Wrightson ICAP writes they were "very happy to have been wrong" about the Fed only boosting its administered rates 3bp (they rose 5bp).

  • "Our assumption was that concerns about the optics of an unexpected rate "hike" might persuade the Fed to limit the size of this tweak, but the Fed delivered a full five basis point adjustment. We think it will be a worthwhile investment in market functioning."
  • In their view, the ON RRP rate rise will make the facility more attractive to market participants, with a "surge" in cash in the facility tomorrow (Friday).

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