The New York Federal Reserve recently held a closed-door meeting with top Wall Street dealers to address rising tensions in the repo market. The discussions, led by New York Fed Chair John Williams, focused on the effectiveness of the standing repo facility in managing short-term rates amid increasing stress signals.
The tri-party repo rate has exceeded the Fed's target, indicating liquidity pressures reminiscent of past market episodes. Despite the Fed's emphasis on the standing repo facility's importance for year-end stability, its usage remains low due to stigma concerns among market participants.
NY Fed Engages Wall Street Dealers on Rising Repo Market Tensions
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