angle-left null Artful Plumbing: A Leak in the Repo Market
Macro & Market

Artful Plumbing: A Leak in the Repo Market

Macro & Market White Paper
September 2019
Artful Plumbing: A Leak in the Repo Market

Robert Bayston, CFA and Head of US Rates and Securitized, and Vincent Reinhart, Chief Economist and Macro Strategist, explain the spike in overnight repo rates and its limited implications for the US economy and rates. 

We do not believe the volatility in funding rates over the last week indicates a systemic problem in the financial system. This is about the plumbing of policy implementation and will have little, if any, impact on our overall outlook on the US economy (a sequential slowing) and the path of monetary policy (a policy rate that holds around current levels and a balance sheet that slowly expands).