Us money markets xxx
中文标题
美国货币市场：美联储激进折扣下，延长期限的价值
Core conclusion · Tlines extraction
The Fed hiked 25bp in September under Chair Kevin Warsh, and markets have hardened a further rate-hike discount. ING argues this is overdone: the 10yr SOFR implies a 5% funds rate for a decade, while ING expects cuts in 2027-2028 back toward 3.5%. With liquidity supported by T-bill buying near a $3tr reserve floor, ING sees value in extending core money market exposures into nine-month to two-year tenors rather than reaching for credit. The balance-sheet reduction debate remains speculative and technically complex.
- Institution
- ING THINK
- Published
- 09/28/2026
- Research topic
- Fed Policy · US 10Y Treasury
- Time horizon
- 2027 · 2026 · December 2026
Key arguments
- The carry spread of the funds rate to the 3yr is back to 100bp versus a 30bp neutral, leaving 70bp of rate-hike discount that ING considers excessive.
- The 10yr SOFR is priced for a 5% funds rate averaged over ten years, an aggressive long-term discount; ING expects cuts in 2027-2028 toward 3.5%.
- Liquidity is supportive: the Fed has bought $360bn of T-bills since mid-December 2025, with total securities holdings up $235bn to almost $6.4tr and reserves maintained near $3tr.
- Extension value is preferred on the core product; pickups into credit remain mild, and money market fund inflows stay firm though retail holdings have flatlined.
Key numbers
- September Fed hike
- 25bp
- Funds rate to 3yr carry spread
- 100bp (neutral ~30bp)
- Implied long-run funds rate from 10yr SOFR
- 5%
- ING expected funds rate in 2027-2028
- ~3.5%
- Fed T-bill purchases since mid-December 2025
- $360bn
Main risks
- The Fed may overshoot to the upside and hike again through the remainder of 2026, keeping near-term rate-hike fears valid.
- A balance-sheet reduction could involve selling $1.9tr of MBS and at least $3.6tr of Treasuries (~$4.5tr total) and requires regulatory changes to bank liquidity ratios; pace and feasibility are uncertain.
- Repo tightness can bully the effective funds rate higher, as seen in the 2019 repo tantrum when reserves dipped below $3tr.
Corresponding source evidence
Liquidity remains supportive The Federal Reserve raised interest rates by 25bp in September.
Markets are expecting more rate hikes, but we see rate cuts in 2027 and into 2028 The call on the Federal Reserve Fed Chair Kevin Warsh delivered on the market discount, and did so after all the talk that this Federal Reserve would do things differently.
· 2027Remarkably, the current 10yr SOFR is priced as if the funds rate is heading to 5% and will average here for the coming 10 years.
Context: the conclusion is Tlines' automated extraction, not the institution's wording. Quoted evidence is publisher wording. Scope and date must travel with the conclusion.
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AI analysis
Cross-institution comparison · FED
| Institution / report | Published | Direction | Source-checked target | Horizon |
|---|---|---|---|---|
| ING THINKUs money markets xxx | 09/28/2026 | Neutral | — | Not stated |
| Saxo BankMarket Quick Take - Chipmakers extend their slide as Brent holds above 107 | 10/19/2026 | Neutral | — | Not stated |
| Commonwealth BankCommBank economists stick with November RBA interest rates call | 10/19/2026 | Neutral | — | Not stated |
| Westpac / Westpac IQ'Australia and NZ Weekly' | 10/18/2026 | Neutral | — | Not stated |
How this page was produced
Tlines extracted the conclusion, arguments, numbers and risks above from the report published by ING THINK on 09/28/2026, then structured them for comparison. The publisher's own wording is reachable through the source link on this page and is displayed in full above. Last updated 10/17/2026. Methodology · Source policy · AI usage · Request a correction