Graph and download economic data for Overnight Repurchase Agreements: Treasury Securities Purchased by the Federal Reserve in the Temporary Open Market Operations (RPONTSYD) from 2000-01-03 to 2026-02-20 about repurchase agreements, purchase, overnight, trade, Treasury, securities, and USA.
So what this is talking about is the repo market. Basically, the TBTF banks are constantly making short term loans to each other (we’re talking literally a day or two) to make sure they’ve got enough liquidity to make all the transactions they need to happen, happen. In certain cases where there’s more demand for the loans than supply, the fed steps in and floats said market until things are stable again.
Now while this can sometimes be a sign of bigger problems, it can also just be a blip. There’s a combination of factors creating a momentary shortage. Also, because they’re short term, the fed will get this money back quickly. If anything would be a crisis indicator, it’d be if the TBTF banks didn’t pay back the fed.
Of course, it does go to show that when it comes to , all talk of “but how will we pay for it?” goes out the window.
can someone who is good at the economy explain why this doesn’t matter
So what this is talking about is the repo market. Basically, the TBTF banks are constantly making short term loans to each other (we’re talking literally a day or two) to make sure they’ve got enough liquidity to make all the transactions they need to happen, happen. In certain cases where there’s more demand for the loans than supply, the fed steps in and floats said market until things are stable again.
Now while this can sometimes be a sign of bigger problems, it can also just be a blip. There’s a combination of factors creating a momentary shortage. Also, because they’re short term, the fed will get this money back quickly. If anything would be a crisis indicator, it’d be if the TBTF banks didn’t pay back the fed.
Of course, it does go to show that when it comes to
, all talk of “but how will we pay for it?” goes out the window.
I’m ok at economy, but this seems like nothing compared to the 2019-2020 propup, where overnights were trading in 20b-60b every day for months even before COVID. Right now it’s something to keep an eye on in case it develops into something interesting.