Let’s cue up a quick arb update…

We predicted the @NotionalFinance variable borrow and fixed lending rates spread would shrink. We live to brag another day, because it’s doing just that.

What else? The lab rats also pointed out that the fixed rate decreasing - and not the variable rate growing - is what would drive the shift.
Gander at the borrow rates above and you’ll notice that the 1d average is 9.45% for Dec 09 and 7d average is 10.39% (an estimator for the future rates). That leaves the arb spread at a menial 3%.

Next predictions:

🔮 The average 7d borrow rate will hold steady between 10% - 12%

🔮 The fixed lending rate will drop to around 11% - 12%

Let's see! You can check yesterday’s analysis here: https://t.co/NPAaM4Iu6m