Rates as of 0500 GMT

Market Recap

US stocks were at least calmer than they were on Wednesday. The NASDAQ spent most of the day in positive territory while the SP spend most of the day in negative territory. They both came off in the last hour of trading to close lower.

The fall in US stock prices doesnt seem to be disturbing the Fed. Kansas City Fed President George V said that recent equity market volatility was not surprising and that while policy isnt aimed at equity markets, it is one of the avenues through which tighter financial conditions will emerge. In other words, theres no sign yet of the Fed being unhappy about tighter financial conditions, which in any case are still around average not yet tight.

Even Minneapolis Fed President Kashkari, the 1 dove on the FOMC, said he wasnt sure how high rates would ultimately need to go and seemed OK with precipitating a recession. We know we have to get inflation down; we are doing everything we can to achieve a soft landing, but Ill be honest with you I dont know the odds of us pulling that off, Kashkari said. If this is what the doves are saying, what are the hawks thinking?

This morning its a sea of green in Asia as all stock markets there are higher. Chinese banks cut their fiveyear loan rate, which is used to price mortgages, by more than expected analysts expected a 5 bps cut, they cut by 15 bps.

Heres a graph of the prime rates since the system began in August 2019. This must qualify as among the most…