/biz/ - Business & Finance

>>17789864
When the Fed announces a purchase operation (or repurchase agreement), primary dealers submit requests to sell/pawn their collateral (like t-notes, bonds, or mortgage-backed securities). An "oversubscription" is when the Fed receives more submissions than the stated operation amount.

For example take the term repos from yesterday. The Fed was only offering $45b for 2-week paper, but received $87.1b in submissions. It means that a LOT of banks/counterparties need the cash and can't get it from anyone else in the repo market (at least, not at the interest rate they need...)

>>17730722
>>17730738
2-week repo just closed, also massively oversubscribed. The banks and other players are screaming for liquidity