5Y Treasury minus Fed Funds in 2019
5Y Treasury minus Fed Funds opened 2019 at 9 bps and closed at 14 bps, a +55.56% move for the year. The high of 22 bps was reached on January 18, and the low of -81 bps on September 4.
Monthly Breakdown
| Month | Open | Close | High | Low | Change |
|---|---|---|---|---|---|
| Jan | 9 bps | 3 bps | 22 bps | -3 bps | -66.67% |
| Feb | 11 bps | 12 bps | 13 bps | 4 bps | +9.09% |
| Mar | 16 bps | -20 bps | 16 bps | -23 bps | -225.00% |
| Apr | -10 bps | -17 bps | 0 bps | -17 bps | -70.00% |
| May | -14 bps | -47 bps | -7 bps | -47 bps | -235.71% |
| Jun | -55 bps | -64 bps | -45 bps | -65 bps | -16.36% |
| Jul | -60 bps | -56 bps | -52 bps | -67 bps | +6.67% |
| Aug | -46 bps | -74 bps | -46 bps | -75 bps | -60.87% |
| Sep | -78 bps | -35 bps | -24 bps | -81 bps | +55.13% |
| Oct | -37 bps | -7 bps | -7 bps | -49 bps | +81.08% |
| Nov | -2 bps | 6 bps | 19 bps | -2 bps | +400.00% |
| Dec | 9 bps | 14 bps | 20 bps | -1 bps | +55.56% |
Events During 2019
Hong Kong's 2019 protests over an extradition bill and Beijing's 2020 National Security Law reshaped the territory's role as Asia's financial hub. Capital outflows, reduced multinational presence, and regulatory divergence from the West had durable effects on regional finance.
Overnight repo rates spiked from 2% to 10% on September 17, 2019, forcing the Fed to intervene with its first open market operations since 2008. The episode revealed structural strains in US money markets that persisted into 2020.
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