Liquidity Alarm? Fed Repo Facility Sees Massive $30.5B Surge
The Federal Reserve’s Standing Repo Facility (SRF) just experienced its fourth-largest spike since the 2020 pandemic, with banks scrambling for $30.5 billion in overnight cash.
The operation—split between $18.5 billion in Treasuries and $12.0 billion in Mortgage-Backed Securities—highlights a sudden demand for high-speed liquidity. While analysts point to a "calendar squeeze" caused by the Presidents' Day holiday and a massive wave of Treasury settlements, the frequency of these spikes is raising eyebrows. $FOGO
The Key Takeaways:
The Cause: A perfect storm of holiday-delayed settlements forced banks to swap bonds for cash to meet immediate needs. $SENT
The Pattern: This follows similar liquidity crunches seen during Columbus Day and the 2025 year-end period. $DEXE
The Risk: If this demand persists beyond holiday glitches, it signals structural stress in the short-term lending markets, potentially forcing the Fed to pivot toward more aggressive liquidity injections.
While the Fed views this as a technical hiccup, the underlying question remains: Is the financial plumbing starting to leak?