The combination of the Fed’s rate cuts and a drop in RRP usage could set the stage for liquidity strains, potentially leading to another repo crisis similar to what happened in 2019.
As expected, RRPs are down again, now below $100 billion as Fed's rate cut has reduced incentive to park liquidity at this facility; we'll be seeing repurchase agreements ramping up in the New Year and then the '19 repo crisis …
