Yesterday's Effective Federal Funds Rate was 4.33%. Am I doing the math correctly and reading the rules correctly that they are MAKING money on Treasury FTD's?

Yesterday's Effective Federal Funds Rate was 4.33%. Am I doing the math correctly and reading the rules correctly that they are MAKING money on Treasury FTD's? penalties for fail = (3% - 4.33%) * (the value of the position owed), which would result in a 'negative' charge for the day?

https://www.newyorkfed.org/markets/reference-rates/effr
https://www.dtcc.com/charts/daily-total-us-treasury-trade-fails

Are there consequences for a failure to deliver? Yes. Not only does the original trade fail, but the party that bought the securities may have already pledged them in a subsequent trade, and now that trade too will involve a failure-to-deliver, thus creating a cascading effect.

Are there penalties for a fail? To encourage prompt delivery of securities, Fixed Income Clearing Corporation (FICC) follows the recommendation of the Treasury Market Practices Group, which is made up of executives from the securities industry. Based on the group’s recommendation, FICC now collects interest at an annual rate of 3% on the settlement value of the trade (minus the Target Fed funds rate in effect the day before the settlement day).

Can you give an example? Let’s assume that a firm fails on a $50 million position on which it is owed $50.1 million. If the Target Fed funds rate the previous day was 1%, then the fails charge will be 2% per year and it will be applied to the $50.1 million total value of the trade. This will result in a charge for the firm of $2,783.33 for that day.

Remember, yesterday the Office of Financial Research found Hedge Fund Activities Can Influence the U.S. Treasury Yield Curve. In summary, the authors found a significant association between movements in hedge fund U.S. Treasury demand and the term structure of bond yields. While hedge funds are not the sole or decisive driver of U.S. Treasury price fluctuations, they certainly play an economically significant and consistent role alongside other market players and forces.

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