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In the Market: The mysterious one-day drop in a repo rate

Something odd just happened in U.S. short-term funding markets: a benchmark interest rate suddenly fell precipitously on March 19 before bouncing back up the next day. The drop, which has garnered little attention outside Wall Street trading desks, happened in a corner of the repurchase agreement market, or repo, where firms borrow funds from investors against Treasuries. That day a key repo interest rate, called the Treasury GCF Repo Index, fell to 5.142%, a significant drop from its previous...
New York United States Darrell Duffie Paritosh Bansal Stanford University Clearing Corp
Source: yahoo.com

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In the Market: Fed piloting another tricky soft-landing

The Fed is close to delivering a rare soft landing for the U.S. economy but it faces yet another fraught challenge: reducing cash in the financial system without disrupting markets. With the Fed having already removed some $1.4 trillion as it shrinks its balance sheet to end pandemic-era support, the focus is increasingly turning to when it should stop. Last week, Fed Chair Jerome Powell said policymakers were nearing a decision to slow the pace of quantitative tightening (QT) to bring reserve...
United States John Velis Mark Cabana Paritosh Bansal Jerome Powell Fed Chair Jerome Powell
Source: yahoo.com

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