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The New York Fed Is Not the Only Place Obsessed with Market Intelligence Gathering; the U.S. Treasury Does the Same Thing in a Secure “Markets Room”

Courtesy of Pam Martens

Trading Floor at the New York Fed (Obtained by Wall Street On Parade from a Fed Educational Video)

Trading Floor at the New York Fed (Obtained by Wall Street On Parade from a Fed Educational Video)

Before daybreak on any business day in lower Manhattan, the glow of lights from Bloomberg terminals illuminate windows at 33 Liberty Street, home of the New York Fed. The New York Fed not only has its own trading floor with speed dials to the Wall Street trading houses, but it also has its own global markets intelligence gathering group, called simply the Markets Group.

According to a previously released educational video featuring Karin Kimbrough, then the Director of Financial Stability Market Monitoring at the New York Fed – a position she held until November of 2014 — the traders at the New York Fed take turns coming in at 4:30 a.m. in order to get a jump on market intelligence by calling their contacts in London, Frankfurt and Japan. (See video below.)

Kimbrough explains what kind of intelligence the traders and analysts are looking for: “…if there was a fundamental reason to see German Bund yields rising, what would be the consistent view across all asset prices. Are we seeing something similar in other sovereign bond markets? Are we seeing something moving in equity markets? Typically, we also try to think a little bit about the context of these moves. Are they large moves; are they moves that we see daily and really something that we’re expecting every morning or every season.”

Kimbrough says this market information is then conveyed to the Federal Reserve Board of Governors in Washington, D.C.: “…we’re essentially doing a lot of market monitoring for these twice a day conference calls with the Board. In addition to that, we’re writing reports throughout the day as well. We have staff who are either writing short-term updates on what’s going on in the equity markets or corporate bond markets. And we’re looking to see if we have any inclination of what market participants are expecting; because market expectations are hugely important for the Fed in thinking about the course of the economy.”

The traders and analysts wrap up their day around 6 to 6:30 p.m. Kimbrough says that it’s a long day because they “try to cover the closing of Japan as well as the middle point of Europe all the way through the U.S. session.”


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