The Wall Street Journal published, "Fed Hike: Moving From 'When' to 'How'." It says, "The market has pretty much gotten the message: barring some unforeseen calamity or significant turn in the economy, the Federal Reserve will raise interest rates at its December meeting. That covers the "when." The folks at Bank of America/Merrill Lynch have started filling in the "how." How will the Fed raise rates, and how will the market respond to that? "When they increase rates," wrote analyst Mark Cabana, "we expect the Fed to raise the interest rate on excess reserves (IOER) to 50bp, move the overnight reverse repo (ON RRP) rate to 25bp, provide details on if or how they expect to use term tools in the normalization process, and continue reinvesting proceeds from their Treasury and agency debt and MBS holdings." In other words, the Fed will fall back on two tools it has at its disposal to set the upper and lower bands of its new range for interest rates." In other news, a press release, entitled, "Moody's Assigns Aaa-mf Rating to Two Money Market Funds Managed by Legal & General Investment Management Ltd," says, "Moody's Investors Services has today assigned a Aaa-mf rating to LGIM Sterling Liquidity Fund and LGIM US Dollar Liquidity Fund, two constant net asset value money market funds domiciled in Ireland managed by Legal & General Investment Management Ltd (LGIM). The ratings reflect Moody's view that the funds will have a very strong ability to meet the dual objectives of providing liquidity and preserving capital.... We expect the investments held in the sterling and US dollar funds' portfolios will be of high credit quality as evidenced by the portfolios' average weighted credit quality of Aa1.... While the US dollar fund's shareholder base is likely to exhibit some lumpiness as the fund grows, our expectation is that the fund will maintain a strong liquidity profile supported by high levels of overnight and near-term liquidity in the portfolios.... The current institutional investor base for these funds is primarily made up of pension funds, sovereign wealth funds, corporate treasurers as well as cash from internal LGIM funds."

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