Federal Reserve Discloses on Oct 1: Reserves Prepared on Sep 30 Were About $8.82 Billion Less Than the Previous Week, with Dollar Borrowing Stress More Like a Temporary Year-End Disturbance.
On Sep 30, the usage of the standing repo facility was $1.2 billion; on Oct 1, both operations were zero. In the same period, the effective federal funds rate remained steady, and there isn’t enough evidence yet of persistently tight conditions.
Dollar funding continues to get more expensive, which will weaken the ability to withstand leverage in crypto positions. For existing positions, this drop in reserves is more suitable to be categorized as short-term funding volatility, and it cannot be directly upgraded into a sustained “dollar shortage.” Having the tools return to zero also doesn’t guarantee that all institutions can borrow smoothly, since the actual overnight rate for Oct 1 has not been released yet.
The key counterevidence is that after the quarter turned, the overnight funding rate relative to the reserve rate the Fed pays to banks has continued to rise; if this is the case, the assessment of funding pressure should be increased.
#美元流动性 #持仓风险
On Sep 30, the usage of the standing repo facility was $1.2 billion; on Oct 1, both operations were zero. In the same period, the effective federal funds rate remained steady, and there isn’t enough evidence yet of persistently tight conditions.
Dollar funding continues to get more expensive, which will weaken the ability to withstand leverage in crypto positions. For existing positions, this drop in reserves is more suitable to be categorized as short-term funding volatility, and it cannot be directly upgraded into a sustained “dollar shortage.” Having the tools return to zero also doesn’t guarantee that all institutions can borrow smoothly, since the actual overnight rate for Oct 1 has not been released yet.
The key counterevidence is that after the quarter turned, the overnight funding rate relative to the reserve rate the Fed pays to banks has continued to rise; if this is the case, the assessment of funding pressure should be increased.
#美元流动性 #持仓风险
