The repo market is ‘broken’ and Fed injections are not a long lasting option, market pros warn
However as the Fed’s interventions have actually entered a 3rd month, concerns about the market’s dependence on its daily doses of liquidity have actually grown.
” The huge picture answer is that the repo market is broken,” stated James Bianco, founder of Bianco Research study in Chicago, in an interview with MarketWatch.
This chart shows the more than $320 billion of overall repo market assistance from the Fed because Sept. 17, when for the main bank began pumping in day-to-day liquidity after over night loaning rates leapt to nearly 10% from almost 2%.
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