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Unusual Whales Pod Ep 17: First FOMC of 2023, Powell and disinflation, and the January 25 bps rate hike with experts

Unusual Whales

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Federal Home Loan Banks Have Extra Cash

Post GFC, we have these new set of rules called Baso three that discourages banks from borrowing overnight from another bank. So what happens now is that right now the only lenders in the federal funds market are government entities called federal home loan banks. A foreign bank borrows from a federal home loan bank takes that money and deposits it at the set to earn interest on reserves. They have a lot of extra cash because they're getting ready to make loans to commercial banks.

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