{"id":42243,"date":"2021-12-27T07:30:57","date_gmt":"2021-12-27T07:30:57","guid":{"rendered":"https:\/\/completeintel.com\/?p=42243"},"modified":"2021-12-27T07:30:57","modified_gmt":"2021-12-27T07:30:57","slug":"benchmark-repo-rate-drops","status":"publish","type":"post","link":"https:\/\/completeintel.com\/ci-markets-weekly\/benchmark-repo-rate-drops\/","title":{"rendered":"Benchmark repo rate drops first time since October amid cash glut, collateral shortage"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><em>This article first appeared and originally published at&nbsp;<a href=\"https:\/\/seekingalpha.com\/news\/3782474-benchmark-repo-rate-drops-first-time-since-october-amid-cash-glut-collateral-shortage\" target=\"_blank\" rel=\"noreferrer noopener\">https:\/\/seekingalpha.com\/news\/3782474-benchmark-repo-rate-drops-first-time-since-october-amid-cash-glut-collateral-shortage<\/a><\/em>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>In the wake of the financial system&#8217;s cash glut and collateral shortage from the Fed&#8217;s quantitative easing program, the Secured Overnight&nbsp;Financing Rate drops to 0.04% from 0.05% on Monday, the&nbsp;<a href=\"https:\/\/fred.stlouisfed.org\/series\/SOFR\" target=\"_blank\" rel=\"noreferrer noopener\">first&nbsp;<\/a>decline since October.<\/li><li>Even with asset purchase tapering underway, &#8220;it&#8217;s largely the same set of circumstances as in October,&#8221; TD Securities Strategist Gennadiy Goldberg told&nbsp;<a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-12-21\/dollar-funding-market-is-feeling-the-strains-of-too-much-cash?srnd=premium\" target=\"_blank\" rel=\"noreferrer noopener\">Bloomberg<\/a>. &#8220;Lots of cash in the system and not a lot of collateral and that&#8217;s weighing down repo.&#8221;<a href=\"https:\/\/static.seekingalpha.com\/uploads\/2021\/12\/21\/saupload_fredgraph__33_.png\"><\/a><a href=\"https:\/\/static.seekingalpha.com\/uploads\/2021\/12\/21\/saupload_fredgraph__34_.png\"><\/a><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/completeintel.com\/ci-markets-weekly\/wp-content\/uploads\/2021\/12\/saupload_fredgraph__33__thumb1-1024x395.png\" alt=\"\" class=\"wp-image-42244\"\/><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Meanwhile, U.S. commercial banks&nbsp;<a href=\"https:\/\/fred.stlouisfed.org\/series\/RRPONTSYD\" target=\"_blank\" rel=\"noreferrer noopener\">park&nbsp;<\/a>yet another record $1.75T at the Fed&#8217;s overnight repo facility, implying the banks are drowning in excess reserves, while searching for yield &#8211; which is scarce as most of the Treasury yield curve trades in net negative territory on an inflation-adjusted basis.<\/li><li>There&#8217;s an &#8220;incredibly large amount of cash sloshing the market,&#8221; said Complete Intelligence Founder Tony Nash via&nbsp;<a href=\"https:\/\/twitter.com\/TonyNashNerd\/status\/1473064175958171648\" target=\"_blank\" rel=\"noreferrer noopener\">Twitter<\/a>.<\/li><li>In August, the Fed&#8217;s overnight repo facility took up&nbsp;<a href=\"https:\/\/seekingalpha.com\/news\/3722550-feds-on-rrp-facility-accepts-1t-from-continued-qe-yield-curve-tightens?source=content_type%3Areact%7Csection%3Amain_content%7Cbutton%3Abody_link%7Cfirst_level_url%3Anews\" target=\"_blank\" rel=\"noreferrer noopener\">more than $1T.<\/a><\/li><\/ul>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/completeintel.com\/ci-markets-weekly\/wp-content\/uploads\/2021\/12\/saupload_fredgraph__34__thumb1-1024x395.png\" alt=\"\" class=\"wp-image-42245\"\/><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>There&#8217;s an &#8220;incredibly large amount of cash sloshing the market,&#8221; said Complete Intelligence Founder Tony Nash via\u00a0Twitter.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-42243","post","type-post","status-publish","format-standard","hentry","category-news-articles-print-web"],"_links":{"self":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts\/42243","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/comments?post=42243"}],"version-history":[{"count":0,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/posts\/42243\/revisions"}],"wp:attachment":[{"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/media?parent=42243"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/categories?post=42243"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/completeintel.com\/ci-markets-weekly\/wp-json\/wp\/v2\/tags?post=42243"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}