Large Wall Street dealers already stand to lose $5 million to $10 million if the spread between overnight and term SOFR moves against them by just 1 basis point, and their exposure grows with every new transaction.
Minutes from the FOMC's December meeting include an unusually blunt warning to investors, cautioning against underestimating the Fed's will to keep interest rates high for some time.
Only the Japanese yen has proved stronger than the greenback among G-10 currencies so far this year, with the Norwegian krone, euro, and Swiss franc falling sharply.
Currently being tested for settling secondary-market transactions in government securities, an "e-rupee" pilot for retail use will be under way within a month.
