The Fed’s New Repo Misdiagnosis. The SRF Won’t Work 1

Fed misdiagnoses problems in the repo market

The Fed has announced that it will establish two new repo facilities, one domestic Standing Repo Facility (SRF), and the other international.

The purpose of which is to ensure that funding markets have ready access to cash during times of acute market stress. While this is a positive step, in the sense that the Fed is actively trying to pre-empt future market meltdowns, it is unfortunately one that will not work.

Here’s why.

Read Article

the pensive nugget blue background logo

Get a different perspective on all things trading & investing every week!