New York Fed Convenes Banks as $6.6T QT Squeeze Tightens Liquidity

The Federal Reserve Bank of New York met Wall Street dealers this week to discuss signs of tightening money-market liquidity. Officials focused on how their key repo backstop is working as short-term funding costs edge higher. New York Fed convenes dealers on standing repo facility The New York Fed convened primary dealers on the sidelines of its U.S. Treasury Market Conference in New York. Officials briefed the banks on recent moves in short-term rates and asked for feedback on the Standing Repo Facility, which aims to cap spikes in overnight borrowing costs. New York Fed Liquidity Meeting. Source: Barchart In the meeting, policymakers reviewed how usage of the facility has picked up from low levels in recent weeks. They noted that the SRF is designed to keep the effective federal funds rate within the central bank’s target range as reserves decline through quantitative tightening. Officials also discussed recent Treasury bill...

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