Fed flags growing liquidity risk in short-term funding markets ⚠️
December FOMC minutes show rising concern that funding markets could come under pressure, even with rates unchanged.
Key takeaways:
• Declining bank reserves may strain short-term funding conditions
• Treasury bill purchases and adjustments to the standing repo facility were discussed
• This is about market stability — not rate cuts or policy easing
Funding market stress often shows up before broader volatility.
If liquidity tightens, spillovers can hit equities, bonds, and crypto.
Worth watching closely 👀