"Repo Market Volatility Prompts Urgent Fed Response"

Wall Street executives anticipate potential turmoil in the U.S. short-term financing markets, with events between March and May expected to reduce cash in the financial system and increase demand for liquidity. The expiration of a Fed lending facility, massive government debt issuance, and faster trade settlement could exacerbate the situation. The Fed's reduction of cash from the financial system and potential stress in short-term financing markets may prompt policy action, with some strategists suggesting a slowdown in quantitative tightening. Sudden spikes in short-term financing markets could pose a threat to financial stability, potentially signaling the need for the Fed to ease policy.