FED: Some talk circulating that a Discount Rate hike may be coming
to center stage shortly.
SMRA in its most recent discussion on the general topic had this to
say – “The first 25 bps adjustment to a 50 bps spread was appropriate,
in that, there was risk that such action might be misunderstood. But we
survived the first adjustment, and the markets understood the technical
nature of that discount rate hike.
Against this backdrop, we see little risk in making a complete return
to a 100 bps spread between the discount rate and the fund rate
target, in one clean swoop.”