Disconnect between Fed funds rate & Money market rates – Nicole Elliott

In this segment, Nicole Elliott, Private Investor and Technical Analyst detail the divergence between the Fed funds rate (currently at 0.5%), Treasury bills and interbank lending. Elliott is joined by Tip TV’s Zak Mir and Alessio Rastani from Leadingtrader.com.

Elliott says the yields on the Treasury bills are far lower than the Fed funds rate, while the interbank lending rates are at least 50 bps above the Fed funds rate. She calls this as the failure of the Fed policy. Elliott then goes on to detail the dynamics of overnight offshore Yuan lending rates.

This should not come as a surprise to the viewers since we are operating under the ‘new normal’.