Most investors assume that when the Federal Reserve cuts rates, borrowing costs fall and liquidity improves across the system. That relationship may not hold in the next easing cycle.
Having spent years in bank liquidity risk management, where Fed policy directly shapes how institutions value deposits and manage balance sheets, I’ve seen how regulatory and policy changes translate into real-world pricing. Those mechanics are starting to shift in ways that may not be obvious from headline rate moves.
Read Full Article »