- Repo Rate Soars As Fed Accepts $63.5 Billion In Collateral On Last Day Of Q3
by Tyler Durden, https://www.zerohedge.com/
With quarter-end funding needs supposedly squared away thanks to last week’s three 2-week term-repo operations, moments ago the NY Fed announced that in the final overnight repo operation of the quarter, dealers submitted $63.5BN in collateral ($49.75BN in TSYs, $13.75BN in MBS)…
… in what was the third consecutive undersubscribed overnight repo operation, yet which saw substantially more participation than Friday’s $22.7BN.
Yet those going off by the detail in today’s repo operation may have a slightly more rosy take on the funding situation because according to ICAP, the overnight general collateral repo rate surged almost 1%, from 1.85% on Friday to as high as 2.8% on Monday, as quarter-end funding dynamics added to pressure on borrowing costs amid an already tense environment for money markets.