HSBC's Logan: Surprise Fed Hike Could Be a Disaster

The video discusses upcoming changes in money market regulations effective October 14th, which will cause prime money market funds to have a floating net asset value. This change is prompting corporate treasurers to move funds to more liquid assets, affecting liquidity in the money market. The video highlights concerns about liquidity and market readiness, especially if the Fed decides to hike rates unexpectedly. While the corporate bond market shows ample liquidity, the money market is in flux, raising concerns about potential market disruptions.

In what ways is the corporate bond market performing differently compared to the money market?

What potential risks does the Fed face if it communicates a rate hike during a period of market confusion?