/biz/ - Business & Finance

Over $132 billion just for the overnight repo. Another record.

As a reminder, before the markets started crashing the Fed was trying to stick to its story of
>We'll only need this until April!
>We're rolling back the liquidity and lowering the cap of repo operations
>See? Repo is contained!!

They had previous lowered their repo caps, but now that everything's crashing Powell turned on a dime again and INCREASED the overnight cap from $100b to $150b and the 2-week term cap from $20b to $45b. The banks and other players in the repo market have called their bluff in a big way. If this continues the Fed will be forced to capitulate completely and start full-on QE that nobody will be able to deny anymore. It's either that or let the repos fail, the effective funds rate spike like it did in September, and the market seize up like it did during the GFC.

The next 2-week repo is tomorrow morning.