Fed Injects $104.2BN Via Overnight, Term Repos One Day After Start Of “Not A QE”

• Fed Injects $104.2BN Via Overnight, Term Repos One Day After Start Of “Not A QE”
  by Tyler Durden, https://www.zerohedge.com/
  One day after the repo market appeared to lock up again, when the Fed’s overnight repo operation was unexpectedly oversubscribed again, for the first time since September 25, moments ago – and one day after the Fed’s first “NOT A QE” Pomo in which the Fed bought $7.5BN in a 4.3x oversubscribed open-market liquidity injecting operation – the Fed announced it had accepted over $104 billion in collateral as part of today’s overnight and term repo operations.
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  Specifically, the Fed accepted $67.7BN and $5.7BN in Treasury and MBS securities as part of today’s overnight repo operation, which however topped out at $73.5BN, just shy of the maximum allotment of $75BN, sparing the Fed the humiliation of explaining why liquidity conditions remains beyond strained.
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  Yet the clearest indication that something remains ominously broken with the repo market, came earlier today when ICAP reported that the day’s first overnight general collateral repo traded at 2.04%/2.01%, both above the upper end of the Fed Fund rate corridor, and confirming that the liquidity shortage is persisting, which prompted us to note that …
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  What is most concerning is that this is taking place as the Fed is now permanently increasing reserves again, which then begs the question: just why are banks so scared of lending money to each other – now that JPM’s previously discussed reticence is also spreading to smaller banks – and choose to park their money with the Fed instead?  What do they know that we don’t.
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