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The Fed Created the Repo Market, then Ignored it [Ep. 273, Eurodollar University]

Eurodollar University

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The Fed Ignores Ripo Again

Jeffrey Toobin: The fed's ignoring it again. We know where the federal reserves reverse ripo rate is, and that's an important number. Some of those are below or very near the overnight rate. And that means what collateral demand in the repo system. Ye we just had an auction this week o four week in eight week bills. It was tremely strong. So why would anybody buy these things if you could just take your cash and lend it to the federal reserve on a collateralized basis at the r r p rate, which is two point three? You don't need the actual return, or you're not willing to take the price of the r pay overpay

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