All You Ever Wanted To Know About Interest Rates | DC Analyst
Interest rates are a key measure of the price of money, but as the plural suggests, there is one more than just one interest rate. Today Jack dives deep into the interest rate structure with whiz kid Kemen Linsuain, known commonly as DC Analyst, who knows a thing or two about the many different kinds of risk-free rates that punctuate the financial system. Kemen tells of the Federal Funds rate, which is the nominal overnight rate that the Federal Reserve controls, to other rates within the Fed’s remit such as the interest on reserve balances (IORB) and the reverse repo rate (RRP). Kemen and Jack then discuss overnight interest rates not within the Fed’s control such as the Secured Overnight Financing Rate (SOFR), the London Interbank Offered Rate (LIBOR), and then other rates and derivatives such as Treasury bill futures and swap rates. Note: the vast majority of rates discussed in this conversation are short-term rates with minimal amounts of credit risk, and should not be confused with corporate bond yield, mortgage rates, or commercial banking rates. Lastly, Kemen shares his thoughts on crypto, and tells Jack about his latest venture into crypto as a content creator at Gauntlet. -- About Gauntlet: https://gauntlet.network/ DC Analyst blog: https://dcchartbook.substack.com/ Latest chartback from DC Analyst: https://dcchartbook.substack.com/p/ch... Follow Kemen on Twitter / analystdc Follow Gauntlet on Twitter / gauntletnetwork Follow Jack Farley on Twitter https://rb.gy/uesguv Follow Forward Guidance on Twitter https://rb.gy/cy0dki Follow Blockworks on Twitter https://rb.gy/igyzsj -- This episode is sponsored by Curve. Curve is unlike any other credit card. It gives you the power to connect multiple credit and debit cards into one, convert your cashback into crypto rewards, Go Back in Time ®, create Smart Rules, and more. Apply now through https://link.curve.com/forward_guidance, you’ll earn $20 in Curve Cash after your first transaction. So sign up today! Terms and conditions apply. -- Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://rb.gy/5weeyw Market commentary, charts, degen trade ideas, governance updates, token performance, can’t-miss-tweets and more. Subscribe to the Blockworks Research “Daily Debrief” Newsletter: https://rb.gy/feusos -- Timestamps: 00:00 Introduction 01:08 Interest Rate Mayhem in 2022 14:19 Repo Markets 21:08. Curve Ad 22:14 Secured Overnight Financing Rate (SOFR) 37:03 Interest Rate Derivatives Market 41:39 LIBOR to SOFR Transition 50:14 Spread Between EFFR & SOFR (Effective Fed Funds Rate & Secured Overnight Financing Rate) 55:26 Overnight Index Swaps (OIS) and Forward Rate Agreements (FRA) 56:50 Negative Swap Spreads 59:48 Term Premium 01:02:12 Thoughts On The Fed 01:06:53 Crypto & DeFi 01:13:34 Where Did The (Crypto) Yield Come From? -- Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.
