The NYFed has quietly injected tens of billions into major banks—now with no limit. Unreported policy changes raise fears of another Wall Street bailout.
Banks get overnight Fed liquidity at 3.75% using their assets as collateral. Regular people facing cash crunches get payday lenders at 400% APR or have to sell their stuff at a loss. That’s an unfair deal, and banks are smart to take advantage of it. But it’s not really a good indicator of collapse. The 2019 repo spike looked scary at the time, rates shot up, the Fed stepped in, and nothing collapsed. This could be something similar. Could be wrong though.
Banks get overnight Fed liquidity at 3.75% using their assets as collateral. Regular people facing cash crunches get payday lenders at 400% APR or have to sell their stuff at a loss. That’s an unfair deal, and banks are smart to take advantage of it. But it’s not really a good indicator of collapse. The 2019 repo spike looked scary at the time, rates shot up, the Fed stepped in, and nothing collapsed. This could be something similar. Could be wrong though.