Financial Times/Joe Rennison and Brendan Greeley/9-21-2019
“John Williams, president of the New York Fed, on Friday questioned the hesitance of the banks in an interview with the FT. ‘The thing we need to be focused on today is not so much the level of reserves [held at the Fed],’ he said. ‘It’s how does the market function.'”
USAGOLD note: We find ourselves in the very odd position of dealing with a repo market that no one completely understands. Williams’ quandary over how the market functions offers some hard evidence of the “uncharted waters” theme we have featured on this page over the past few weeks. That uncertainty, of course, is the result of the low to below-zero interest rate environment. The repo market may not be the only sector of the money markets where danger lurks.
