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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 day's print of 5.334%.

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... -April 12, 2024 at 01:00 am EDT - MarketScreener

Banks are finally signing up for a U.S. Federal Reserve funding backstop that has been lying nearly dormant for more than two years, putting them in a stronger position to deal with any stress. But it...

Banks are finally signing up for a U.S. Federal Reserve funding backstop that has been lying nearly dormant for more than two years, putting them in a stronger position to deal with any stress. The Standing Repo Facility allows banks to borrow emergency overnight cash from the Fed through a repurchase agreement, or repo, using Treasury and agency mortgage securities as collateral. Firms that act as the New York Fed's trading counterparties, called primary dealers, have access, but other banks have to apply for it.

There are growing questions about the structure of the Treasury bond market and whether the way the US government funds itself is up to the task.