The Fed Loses Control of REPO Markets; Banks, Bonds, and the Federal Reserve, Explained


Banks are sitting on enormous piles of cash with little to do with it. People aren’t taking out loans and they have serious restrictions on what assets they can buy. Banks were going all in on bonds until the government hit the debt ceiling and stopped issuing fresh bonds. Now they’re lending it to one another and writing out the Federal Reserve. Here’s what’s happening.