Bix Weir, X22, and Federal Reserve News Wednesday 9-18-19
Fed Funds Prints 2.30%, Breaching Target Range For The First Time, As Libor Replacement Soars To "Remarkable" 5.25%
by Tyler Durden Wed, 09/18/2019 - 09:17
If today's second consecutive repo was supposed to calm the stress in the secured lending market and ease the funding shortfall in the interbank market, it appears to have failed.
Not only did O/N general collateral print at 2.25-2.60% after the repo operation, confirming that repo rates remain inexplicably elevated even though everyone who had funding needs supposedly met them thanks to the Fed, but in a more troubling development, the Effective Fed Funds rate printed at 2.30% at 9am this morning, breaching the Fed's target range of 2.00%-2.25% for the first time.
And yes, it is quite ironic that on the day the Fed is cutting rates, the Fed Funds was just "pushed" above the top end of the target range for the first time ever.
This also means that the EFF-IOER spread has now blown out to an unprecedented 20bps, yet another indication that the Fed has lost control of the rates corridor.
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Liquidity Shortage Getting Worse: Fed's Repo Oversubscribed As Funding Demand Soars 50% Overnight
by Tyler Durden Wed, 09/18/2019 - 08:45
20 minutes after today's repo operation began, it concluded and there was some bad news in it: as we feared, yesterday's take up of the Fed's repo operation which peaked at $53.2 billion has expanded substantially, and according to the Fed, today there was a whopping $80.05BN in bids submitted, an increase of $27 billion, or 50% more than yesterday.
It also meant that since the operation - which is capped at $75BN - was oversubscribed by over $5BN, that there were participants who did not get the last-minute liquidity they needed, and that the Fed will see demands to either expand the size of its operations, or implement a fixed operation and/or transition to permanent open market operations, i.e. QE
What is immediately notable is that except for agency paper, there was a greater use of both Treasury ($40.9BN to $51.6BN) and Mortgage-backed ($11.7BN to $27.8BN) collateral. The only silver lining: the step out rate on agency paper dropped from 3.00% to 2.1% however with virtually nobody using that, it is a largely meaningless easing in terms.
Finally, the worst news is that immediately after the operation, overnight repo remained elevated, with Reuters reporting the rate was 2.25%-2.60% after the latest repo operation, confirming that the liquidity shortage continues with the high end of repo still far above fed funds.
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Economic Collapse News-The Feds Rescue Attempt Fails As Liquidity Crunch Unfolds After The Feds Repo
Silver Report Uncut: Published on Sep 18, 2019
Economic collapse news. The Fed has just completed its first Repo in a decade and it seems it failed. Several economists have been warning of this liquidity crunch that is beginning to grip the US banking sector. 53.2 billion dollars worth of liquidity gaps.
That's not the max amount but a significant shortfall and it shows the market rejects the artificial low interest rates. When banks need money and there is none to have they must pay any rate possible not the rates set by the fed.
Yes that would mean the fed has lost control of interest rates. The Fed meets today to determine whether to cut interest rates and the overnight liquidity needs commanded an interest rate of 10% at one point.
Bix Weir: Road to Roota
ALERT: Banks Desperate for More Fed Bailout Money as $75B Was Not Enough!! (Bix Weir)
Published on Sep 18, 2019
$75B...Gone and the Banks come back for more! Everything is falling apart behind the curtain and you have a front row seat on the Road to Roota!!
The Fed is in meetings today and it is chaos behind the scenes…….
Every Move Trump Makes Chips Away At The Fed, Soon There Will Be Nothing Left: David Moadel
X22 Report Spotlight: Published on Sep 18, 2019