Repo’s Era of Calm Is Over as Fed Pullback Reignites Volatility
- ‘It’s finally happening,’ Curvature Securities’ Skyrm says
- Fed’s balance sheet unwind, Treasury issuance will drive moves
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The era of calm in short-term funding markets is over.
After roughly four years of orderly trading when banks and fund managers lock-in funding at the end of each month, quarter and year, volatility has erupted again. Gyrations in repo rates sent one benchmark to a record on Thursday, while huge oscillations beset the market for short-term loans collateralized by Treasuries.