https://finance.yahoo.com/news/1-fed-buy-60-bln-153937503.html
The overnight RRP had been in chaos since September 2019 and spiked above its set range.
Why is this happening?
First of all, overnight RRP is a short-term agreement to purchase securities in order to sell back the same securities the next day (overnight) at a profit (interest earned).
When the overnight RRP spikes, it means that the buyers/investors do not have faith in the securities being offered as collaterals or there are not enough buyers/investors around in the market.
Whatever is the case, this spike denotes a bad economic or financial situation that can spill over to other financial assets and destabilize the financial market. Therefore, the US government has to step in to stabilize the short-term situation by purchasing the T-bills to show that the securities offered are not non-performing collateralized loans.
Subscribe to:
Post Comments (Atom)
2 comments:
$$$ GENUINE LOAN WITH 3% INTEREST RATE APPLY NOW$$$
Do you need finance to start up your own business or expand your business, Do you need funds to pay off your debt?
We give out loan to interested individuals and company's who are seeking loan with good faith. Are you seriously
in need of an urgent loan contact us.
Email:flourishloancredite@gmail.com
LOAN APPLICATION DETAILS.
First Name:
Last Name:
Date Of Birth:
Address:
Sex:
Phone No:
City:
Zip Code:
State:
Country:
Nationality:
Occupation:
Monthly Income:
Loan Amount:
Loan Duration:
Purpose of the loan:
where did you hear about us;
Email:flourishloancredite@gmail.com
https://sg.finance.yahoo.com/news/u-banks-reluctance-lend-cash-070331477.html
The repo spiked because the US banks refused to lend money in exchange for pledged securities. Why did the US banks refuse to lend money?
Were they short of money or they didn't have faith in the pledged securities?
Post a Comment