All articles tagged with #money market
Banks borrowed a record $50 billion from the Fed's new Standing Repo Facility (SRF) amid volatile repo rates, with ON RRP balances also spiking to $52 billion, indicating significant liquidity movements at month-end. The activity reflects efforts to keep repo rates aligned with the Fed's policy rate, and the Fed's liquidity tools are being further optimized to ensure market stability.
The US Treasury is set to reduce the supply of Treasury bills, coinciding with the Federal Reserve's plans to taper its balance sheet unwind, which is seen as favorable for investors who have been heavily investing in the debt. The reduction in bill sales is expected to exceed $250 billion between April and June, reflecting a decrease in appetite for short-dated government debt. This move comes as the gap between money-market fund assets and total bills outstanding narrows, and the usage of a key Fed facility declines. The Treasury's efforts to term out the debt through larger coupon auctions are viewed as prudent in this context, as the market may soon reach a turning point in absorbing bill supply.
The People's Bank of China plans to inject ample liquidity into the money market after interest rates surged, with state media blaming financial institutions for causing the disturbance. Money market rates are expected to retreat towards rates used in the central bank's open market operations, and liquidity in the banking system is said to be relatively abundant.