Jan 22 (Reuters) – Some Wall Street executives feel a tantrum coming in U.S. short-term financing markets, perhaps as soon as March. It could put pressure on the Federal Reserve to ease policy.
A series of events are expected between March and May, some of which will reduce the amount of cash in the financial system, while others increase the demand for liquidity, according to interviews with four banking executives.
A Fed lending facility that was put in place after the regional banking crisis last year will expire on March 11, with $129 billion outstanding. That will remove what has become an attractive source of funding for banks. Another market backstop, called the standing repo facility (SRF), that Fed officials have held up as a safety net has seen only a few banks sign up so far.
www.reuters.com/markets/us/market-repo-market-may-throw-fit-spur-fed-action-2024-01-22/