Repo Market Volatility

Adam Buresh

Market Minute

October 1, 2019

Last week, overnight repurchase transaction rates spiked from roughly 2.1% to about 3.5% according Bloomberg.  Some repo rates were as high as 10% before the New York Federal Reserve intervened to offer repos to reduce rates.  Repo rates typically bounce around a bit, but 10% is significant and intervention by the Fed are out of the ordinary.  In this week's Market Minute®, Adam Buresh explains three reasons for the temporary spike.