The euro, yuan, pound and yen do not have the adequate depth to support the liquidity needs of the global systematically important banks. … READ MORE >
Fed repo facility
Market Minute: The perils of relying on T-bills to finance the deficit
Reliance on the front end of the Treasury curve, and a drawdown in the repo facility, open the government to the risk of increased volatility, … READ MORE >
Bank deposit carousel continues as investors search for yield
The large gap between money market funds and bank deposit rates as well as what the banks themselves can obtain risk free at the Fed’s repo facility implies that cash will continue to move into the short end of the curve. … READ MORE >
Rising uncertainty stimulating a flight to cash
With the U.S. two-year yield now exceeding 5% and the Federal Reserve’s repo facility offering a return of 4.5%, capital is flowing into short-term securities in search of safety and yield. … READ MORE >