The Way You MOVE
Mar 31, 2023
• 13
Min Read
Bond Volatility Moving Lower is Good for Liquidity
Over the past few weeks, we have discussed how the ongoing banking crisis, the Fed's language shift and easing monetary policies from major central banks have led to increased net liquidity in the U.S. and higher global USD liquidity.
One risk that these absolute liquidity levels face is a negation by the Fed’s reverse repo facility. The Reverse Repo Facility (RRP) is a tool used by the Federal Reserve to control overnight interest rates by decreasing the number of reserve balances in the banking ...