Banks Still Starved For Cash: Repocalypse Continues

5 years ago
1

The Federal Reserve is still struggling to suppress the recent surge in the overnight repo rate. This seems odd to me considering that the banking system is still sitting on a mountain of excess reserves. The only answer I can come up with is that the banks holding excess reserve see the banks in need of overnight funds as too great of a risk at the 2% target rate set by the Fed.

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