2026-01-01 20:28:01

Year-end liquidity crunch intensifies across financial markets. The Federal Reserve's Standing Repo Facility (SRF) witnessed a sudden spike in demand, hitting $75 billion—the highest level since the facility became permanent back in 2021. This uptick signals growing strain in the financial system as institutions scramble for cash. The SRF mechanism allows banks to tap into Fed liquidity by pledging U.S. Treasury securities as collateral, serving as a crucial backstop during periods of cash scarcity. Such elevated utilization suggests market participants are bracing for tighter conditions heading into the new year, a dynamic worth monitoring for broader asset class implications.

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OneBlockAtATime

· 13h ago

The demand for 75 billion repos is really getting a bit tight now... --- The Fed has to really put in some real money this time, banks are all running on withdrawals --- Wait, does this mean liquidity will be even more competitive next year? Feeling a bit anxious --- It's that old trick of year-end funding pressures again, happens every year --- Treasury collateral swapping for liquidity, feels a bit like drinking poison to quench thirst --- It hits right at the core of the problem, institutions are all preparing for tighter conditions --- 75B hitting a new high... will the next break through 100? --- When repo gets tight, the whole market has to suffocate along with it --- Facing liquidity tightening at the start of the new year, quite interesting

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