Fed repo facility may fix SOFR’s image problem
‘Overnight standing repo facility’ could stop year-end rate spikes, and extend Fed’s reach
On the last day of 2018, the repo rate exploded, shooting up 147% to an intraday summit of 7.25%, in a market preview of the starry pyrotechnics that ushered in the new year that evening.
“I was flabbergasted by what happened at year-end,” says Christian Rasmussen, head of group Treasury assets and liabilities for the Americas at UBS, capturing the mood of those in attendance.
Though repo staged
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