Thanks for such a lucid explanation 👌🏻. Even after the RRP is exhausted, the liquidity tap will be kept running by Fed, by suspending the Supplementary Leverage Ratio (SLR), which they already did once in 2021 !

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content Yes agree, entirely possible that if push comes to shove, Fed could relax SLR requirements as they did in 2021

What a quality information. I wish, I had a teacher like you during my college. Thank you.

@IndraanilGuha

Ай бұрын

Many many thanks for such generous praise.... truly humbled! Glad you liked the video

Crystal clear..I have listened every words..and its clear money is going out from market by FII what your are telling its already happening.but market up only of DII if DII not sell too much significant correction will not come it will consolidate..and it stock will not perform well.

Very informative. Thanks for putting all the facts together.

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content

Great Video!!! It's very informative video..for investors

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content

Thank you so much for sharing information that is restricted to high financial circles only 👍

@rajtimilsina100

3 ай бұрын

restricted to high financial circles 😂

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content

It was a real knowledge addition by your simple and sound explanation. Thanks for the content

@IndraanilGuha

17 күн бұрын

Many thanks... glad you liked the content!

Amazing content, keep going, u deserve lot more subscribers

@IndraanilGuha

3 ай бұрын

Glad you liked the content, Thank you for your support!

Instant subscribe

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content

Thank you sir for such wonderful insight. I became fan, there are not many Indian Analyst on KZread with such insight The perfect storm in US finance: 1) Commercial real estate on the verge of collapse more than 1.7 Trillion on the line 2) Credit card delinquencies on highest point with 1.2 T debt and growing 3) Biggest US treasuries buyers China and Japan are reluctant in new purchase 4) by 2025 many big tickets Corporate Debt Rollovers are pending so job cuts are already started. unemployment will explode. I think if US govt bond auction fails (which is quite possible without QE) this would be trigger for collapse.

@IndraanilGuha

2 ай бұрын

Many thanks for the super kind words... glad you liked the video And you have shared some very interesting perspectives indeed... and this has a good chance of playing out, as and when liquidity conditions start to tighten up. But I don't think that's happening in a hurry, because Fed will try everything to keep things propped up for as long as it is realistically possible

Very valuable and information rich video. One request : Yield curve inversion chart ( red color ) is drawn till 2023 . Could you please extend it till 2024 current period and post the picture ❤❤❤❤❤

@IndraanilGuha

2 ай бұрын

Many thanks for the super kind words... glad you liked the video My primary motivation is just that - to make things easy, so that anyone - even those NOT from a finance background - can understand my content Most up-to-date data on the Yield Curve can be found at: fred.stlouisfed.org/series/T10Y3M#0 (Yield curve is negative right now i.e. as of 14 Apr 2024… once the value of the Yield curve data available on the above URL turns positive, that’s the point the Yield Curve would be said to have “un-inverted”)

This is good quality work. Keep going explaining concepts across the board. Given the quality you are likely to be a big hit!

@IndraanilGuha

2 ай бұрын

Many thanks for the kind words... glad you liked the video

Very informative!!

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content

WOOW, I never expected this kind of knowledge and concept explanation videos available on You tube. And you explained the whole working and system of US financial market so descriptively that I don't have to use much brain in it. Great work .. subscribed super fast.

@IndraanilGuha

2 ай бұрын

Many thanks for the super kind words... glad you liked the video My primary motivation is just that - to make things easy, so that anyone - even those NOT from a finance background - can understand my content And thanks more for for subscribing to my channel

Very informative video …keep it up 👍

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content

Kya baat hai sir aap pehle kaha the laakho ka data aapne kitna badhiya samjhaya Thanks

@IndraanilGuha

2 ай бұрын

Many thanks Swapnil ji for such generous appreciation... glad you liked the video

Instant subscribe..

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content

Fed has reduced the QT at this FOMC meeting. Ideally that will increase the money supply and eventually they will start cutting rate and the start QE if needed and their goes your argument about money supply. So i am not sure its that simple predicting crash as you sounded it like ..

I hope you keep making such videos.

@IndraanilGuha

2 ай бұрын

Many many thanks for your love and support... glad you liked the video

God evening, One correction at time stamp 20:47 : Along with QT of 95 billion $ per month, there is US debt ceiling agreement reached i.e. Bond issue since June 2023 (which you explained in earlier videos) also which is contributing 100 billion $ per month.(whether it continued till date not mentioned).........so total out flow 195 billion $. Due to RRP inflow approximately 159 billion $..... accordingly liquidity out flow very little 40 billion $ per month. Is my understanding correct?

What I understood is that Reverse repo rate is the rate of intrest fed give on depositing the money, and fed fund rate is the rate of intrest taken by fed in giving loan. I greatly appreciate if you make a video to explain it clearer

@IndraanilGuha

Ай бұрын

Yes, RRP is a facility wherein the Fed pays interest to those who park their money in the facility. BTW, retail investors can't directly park their money in the RRP, since the facility is open only to institutional investors. But there are many debt funds / money market funds in US that can invest in the RRP and retail investors can invest in the RRP through these debt funds / money market funds. Fed Funds Rate (FFR) is NOT exactly the rate of interest the Fed charges for giving loans. That's technically incorrect because as such, the Fed does NOT directly give out loans. But the Fed influences overall interest levels in the US through the FFR. When the Fed hikes the FFR, it ultimately leads to banks and other lending institutions in the US hiking the interest rate on all new loans, and when the Fed cuts the FFR, it leads to banks cutting interest rate on all new loans. I have done a detailed video on FFR, which is available at: kzread.info/dash/bejne/mJaFwZakkbbLfdI.html

I used to see the "markets" only in terms of "rate-hikes/rate-cuts". And have been wondering why markets continue to rally despite rate-hikes. You are helping many non-finance guys like me to understand markets in a simple way. 1. Are there any other factors apart from fed rate/rrp/yieldcurve which may trigger bigger turmoil? 2. Are there chances of FED rate breaking long term trendline(1980-2020) and going berserk, with hot inflation? Kindly share such knowledge with us. Thank you sir.

@IndraanilGuha

Ай бұрын

Many thanks... glad you liked the content! 1. There are tons of other variables that impact the markets, but the three I have listed for arguably the most important for now 2. I do believe that the 40-year bull run in bonds is over and that average inflation levels and interest rates will be higher in this decade than was witnessed in the 2010s

I'm genuinely glad that i found your channel. Just a small doubt- the two scenarios where you talked about having rrp facility and one having not, why have we assumed there are already ample reserves in rrp account and not considering the source of rrp reserves (in scenario with rrp facility)? Ain't that money also coming from outside rrp liquidity ?

Dear Sir, Wish to see the inflow of DIIs laid over the curve sire… ? Also if the Nifty earnings and Nasdaq earnings are laid over ?

What about domestic funds? If the FPIs flow stops coming in but Domestic investors pump money at the same time, wouldn’t that keep the markets at all time high? Basically help consolidate instead of a drop

@coldstone87

3 ай бұрын

Domestic investors are just herd people. They are breaking FDs and depositing in markets

@IndraanilGuha

3 ай бұрын

Great question... domestic flows (especially those from SIP investors) have indeed served as a big cushion for Indian markets. These flows are now at a staggering 19,000 crores+ per month, and have helped shield our markets from the adverse impact of relentless selling by FII between 2021 and 2023. But we should NOT overstate the importance of domestic flows... there is a growing feeling, I believe amongst analysts in India that the scale of domestic flows are now so large that Indian markets are now arguably completely insulated from the adverse impacts of any risk-off events in global markets... and this is where I tend to strongly disagree with the emerging consensus. I do agree that thanks to our strong domestic flows, selling by FIIs will NOT cause the sort of drawdowns in Indian markets anymore that we saw back in 2008, when FIIs selling just about 40 - 50,000 crores worth of shares led to the NIFTY collapsing by a staggering 60%. Having said, I don't think our domestic flows are so material that Indian markets would be insulated from the adverse impacts as and when, let's say the US economy goes into a recession and there is a large correction US markets as a result of that. I will try to do a video in near future explaining these in greater details in the near future

Can the Fed not print more and more money as they have been doing all these years and resolve this problem?

@IndraanilGuha

3 ай бұрын

At this stage, it would be difficult for the Fed to go back to outright money printing (i.e. QE) because that would almost certainly be inflationary... all the money printing that the Fed did post COVID led to inflation going to a 40-year high of 9.1% (by June 2022) and since then, Fed has had to resort to rate hikes at the steepest pace in recorded history to get inflation down, and yet inflation, though down from its peak, is NOT yet down to the 2% level that the Fed is targeting. Going back to money printing at this stage could well undo all these efforts by the Fed to bring inflation finally under control... So at this stage, my reading is that the Fed will NOT go back to money printing in a hurry, unless some really grave systemic risk emerges that threatens to stability of the overall financial system.

sir, last few months data shows net outflow of FII money out of Indian stock markets. Then how come Indian markets are going up based on RRP. Please explain if I am missing any link here

Hi Indraanil, I am really enjoying and understanding your videos. Please keep it up. A question related to Fed RRP outflows relative to the US Bonds. Thank you very much🥰 Do I understand correctly that the Fed would buy some amount of the bonds, as they rate is higher, thus resulting in less bonds for investors to buy, and thus they will look for other other assets like equity markets. Thereby increasing liquidity of the equity market? 🙏

@IndraanilGuha

Ай бұрын

Many thanks for the super kind words.... glad you found the content to be useful I have addressed your question on how RRP outflows help improve liquidity of equity markets in a dedicated Q&A video, which is available at: kzread.info/dash/bejne/q5Vhxpqkg6ngdKg.html Watch from 3:03

What an awesome video. Cleared many doubts. Finally understood what this reverse repo thing is. Can you make a similar video about dot plot of fed?

@IndraanilGuha

3 ай бұрын

Many thanks... glad you liked the content Sure, dot plot would be an interesting topic to explore... would do a video as and when the dot plot is indicating a dramatic change in Fed policy

Quick question As debt interest rate will decrease - will the money from debt return back to Equity? Will this offset supply from RRP?

@sanketnegi1

3 ай бұрын

I think it would majorly go to gold and real estate.. But I hope I am wrong

@mayankuniyal6888

3 ай бұрын

@@sanketnegi1gold is already at peak. Real estate is the best bet as it offers tax benefits on equity market profits

@IndraanilGuha

3 ай бұрын

I am sorry but I am not sure if I fully understood your question... as such interest rates coming down do NOT directly help improve liquidity conditions. Interest rates refers to the cost of money, and liquidity coming from RRP refers to the quantity of money. In my view, the only action of the Fed that can help liquidity conditions once the RRP is fully exhausted is if the Fed starts to wind down the rate of QT, or end QT altogether, both of which I believe is highly likely as and RRP balance is fully exhausted.

Is the reverse repo rate is same what we are expecting fed to cut rate?

@IndraanilGuha

Ай бұрын

NO Reverse Repo and Fed Funds Rate are different! You can track the current balance in Reverse Repo at: fred.stlouisfed.org/series/RRPONTSYD When we talk about rate cuts by Fed, we are then talking about Fed Funds Rate (FFR). You can keep track of FFR at: fred.stlouisfed.org/series/FEDFUNDS

@mobinjsr1934

Ай бұрын

@@IndraanilGuha thank you for response

We are grateful to you Sir - may God Bless You. I have a few questions in my mind, please pardon me if I sound a little foolish - My 1st Question is : Sir in Case B (as you said) US Govt comes up with 800 billion dollars bond and no RRP reserve - in that case if an investor buys those bonds then they will be left with only 200 billion dollars - liquidity dries out ......But why would an investor buy a 5.5% yield bond (though risk free)! - what if they stick with the equity market? There might be some risks in the equity market but Risk premium is also very robust!! Please, clear that doubt sir. My 2nd Question is : Sir, you told the RRP balance (@5%), say 2 trillion dollars and US Govt bringing 1 trillion dollars bond @say, 6% ....... Therefore 1 trillion dollars' natural outflow from RRP to BOND But, What is the use case of the remaining 1 trillion dollars (that stays in RRP)? My 3rd Question is : Sir, RRP in passive way can maintain the liquidity in the market - means it acts as shield against the borrowing mindset of US Govt. But if US Govt doesn't want to borrow aggressively, will that RRP balance still be very important to keep the liquidity intact?

@IndraanilGuha

Ай бұрын

Q1: You and I can invest all our money in equities if we so wish, but NOT everybody can do that, especially institutional investors such as pension funds, university endowments etc., who need to mandatorily have a certain part of their portfolio (as per their mandate) in high quality fixed income instruments (especially US government bonds) Q2: The rest is to offset the impact of Quantitative Tightening (QT) being conducted by Fed since Jun 2022 at a rate of $95 billion per month (now revised down to $60 billion per month) Q3: If US government stops issuing fresh bond, RRP balance stops going down (as indeed has been the case over the last one month or so). The US government sold huge quantities of bonds through 2023 and early 2024 and filled up its coffers much before the money was actually needed. Hence fresh borrowings by the US government by way of bond sales have been very limited over the last month or so, and as a result the drawdown from the RRP has taken a pause during this time.

@navneetmukherjee9592

Ай бұрын

@@IndraanilGuha Your quick and rational responses are the testimonies of your talent and accountability.....Thank you sir. Apnar kachh theke aro, aro shekhar ichchhe thaklo. Sir kono valo boi er recommendation daoa Jay jate macro economics e dokhol bare plus stock market e investment aro juktipurno korte pari

@IndraanilGuha

Ай бұрын

Most of these concepts are so new and still in such an evolving state that it would be difficult to find books covering them all comprehensively just yet! My own understanding about these concepts largely stems from years of following some of the top experts in the field of global macros on KZread. Two channels that I would highly recommend in this context are: www.youtube.com/@macrovoices7508 www.youtube.com/@BlockworksHQ Both these channels do an awesome job with respect to getting some of the top exerts in global macros from around the world on their podcasts. I have found these two channels to be immensely useful in helping me keep myself abreast about the latest developments in the global macro-economic landscape and their implications for equity markets. Hence would highly recommend both these channels… chances are you may not follow/understand everything in the initial days… but don’t be deterred by that… keep listening, and over time I assure you, things will automatically start to make sense

So lets say if FFR is 5.5% means bank intrest rate on loan is 5.5% in America?....How this fed fund rate related to the bank intrest rate on loans and emi...I know if FFR is high then intrest rate on loan is also high but I don't know how intrest rate on loan is calculated based on FFR....I greatly appreciate if you clear it. Thank you sir😊

@IndraanilGuha

Ай бұрын

Bank interest rate can’t be the same 5.5% for everyone! The interest rate that applies to each individual or company depends on multiple factors, but most important on the credit history/score of the borrower… someone with a great credit history might be able to get a home loan at let’s say, FFR + 1%, while someone else with not as great a credit history would have to pay FFR + 2% on his home loan

@mobinjsr1934

Ай бұрын

@@IndraanilGuha Thank you sir your response is greatly appreciated