‘The Levee Has Broken’: Misbehaving Repo Market Underscores Loss Of Fed Control

‘The Levee Has Broken’: Misbehaving Repo Market Underscores Loss Of Fed Control

You can probably expect another IOER "tweak" from the Fed on Wednesday, or even "emergency" action before then, in an effort to alleviate an acute funding squeeze. "The USD funding levee has broken", BofA's Mark Cabana wrote Monday evening, following a spike in GC repo around large coupon settlements and this month's corporate tax payment deadline, which is expected to suck between $75 and $100 billion out of funding markets. Monday's (mis)behavior in GC repo spilled over, with widening in FRA
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