The first of the Fed's “ultra-long" term repos was two times oversubscribed on Monday, a development which will be pitched as wholly unimportant, totally expected or a blaring ambulance siren, depending on whose take you're inclined to believe.
As a reminder, the Fed announced the new schedule a couple of Thursdays ago, and it didn't exactly come as a surprise that they offered tenors beyond the 14-day operations they began conducting alongside the O/N ops necessitated by the September funding squeeze.
There are plenty of folks who continue to fret about the possibility of the September episode repeating at year-end. BofA’s Mark Cabana, for example, has variously warned about a "combustible cocktail" of reserve shortage and dealer intermediation constraints related to GSIB.
Read more: Analyst Who Called Funding Squeeze Not Blown Away By Fed’s Longer-Term Repos
The Fed took $49.05 billion in bids for the first of two 42-day term operations on Monday.
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