It appears the markets will be gamed today. Despite the dollar is stronger across the board, crude and stocks point to a higher open as the window dressing will be in full swing today.
JPMorgan Chase said Monday that it would offer its high-net clients a bit more interest on their savings as a result of the Fed’s rate rise early this month.
There’s no way JPM wants to take on more savings deposits on its balance sheets since the bank is hamstrung by the Fed to lend these deposits to its clients under the fractal reserve system.
Under Dodd/Frank JPM and any other Fed-chartered bank, would have to account for the additional savings amounts on its balance sheet as a liability. So by setting the parameters high for the interest bump JPM does not expect a deluge of clients, since most are getting a better rate of return from other investment vehicles. JPM expects these people not to chase an eighth of point interest jump.
It gives you a hint of just how impaired and perverted the US banking system is. The banks get a bump up on their deposits at the Fed and in exchange for the deposits they get treasury notes placed on balance sheets as capital, and yet they still can’t or won’t pass along a higher rate of return on customer balances.
It’s in no way limited to JPM, all other banks have said point-blank they are not raising rates at all.