Why do money market rates differ?

Question

commenting on how each Money Market instrument relates or can be compared to U.S. Treasury and Corporate securities

Answer 1

It is a buy / sell enviornment, all inter-connected. The various market makers and institutions (banks) maybe try a number, and someone does a quarter point better, and the makers, banks, have the quarter point difference in view of the market. Also, there are short term promo deals excess and shortage within a chain of banks, as treasury bond trader explained it to me:

guys show up with the idea it is off a few points and want to buy or sell, maybe they watched the Japan market open early on Monday, more buyers = price goes up, not enough buyers, = price goes down in order to sell. Then comes the wrinkles, institutional investors with salary paid staff, etc. Sometimes it's only 1/4 of a point to change sentiments.

Answer 2

Why do the prices of any commodity fluctuate
? Typically the best MM rates are found at the internet banks because of the lower overhead costs. However, shop around like you would for fresh fruit. It is the same process.