Repo Worrywarts Turn Their Attention to Next Monday and Dec. 31
- Third straight Fed year-end repo operation was oversubscribed
- And Dec. 16 is in focus because of Treasury settlements, taxes
A U.S. one dollar bill is1 arranged for a photograph in New York, U.S.,
Photographer: DANIEL ACKERThis article is for subscribers only.
Investors are eagerly lining up backup financing just in case the U.S. repo market, which worried Wall Street when it went haywire in mid-September, sees turmoil at the end of the year.
For the third straight Monday, the Federal Reserve conducted funding operations designed to give traders extra liquidity around Dec. 31, a time when repo liquidity has historically dried up. All three were oversubscribed, meaning market participants bid for more than the central bank was offering. The latest one got requests for $43 billion versus the $25 billion maximum.