Wednesday, June 9, 2021

Surging Demand For Fed's Reverse Repo Facility

The Fed
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

The consequences of the Fed's actions, revealed by trends of price, leverage, and time, are defined and discussed in The Matrix for subscribers.

Subscriber Comments



Fed is selling Treasuries in the Reverse Rep facility at an alarming rate.

The Fed’s reverse repo program lets eligible firms, like banks and money-market mutual-funds, park large amounts of cash overnight at the Fed, at a time when short-term funding rates have fallen to next to nothing, and finding a home for cash has become harder.

Either there is too much cash or not enough collateral. 2019 it was not enough collateral. Could be the same in 2021, but everyone is covering it up. It could easily be too much cash and no place to park it for a positive return.

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