Jack Krupansky points out the the Fed Funds rate has been trading near 0.25% for the last couple of days. This is the ceiling on the Feds current target range.
I am not sure what is causing this. There are no obvious signs. The latest data from the Fed continues to show plenty of excess reserves in the system. Though they are down from their peak.
What has gone on since last week? Are banks starting to lend more? Is there a big bank in trouble? Is the Fed draining reserves? Do banks just want to be paid more? Suddenly, Thursday's H.3 report, the report on Aggregate Reserves of Depository Institutions and the Monetary Base has become a must watch release. It hits at 4:30 PM ET.
This Fed Funds climb is like a low grade fever without a clear understanding of the cause, something new is going on, what it is, is not clear. But it does call for close monitoring.