- Unclear when reserves will grow scarce
- All signs suggest reserves remain abundant
- Money markets will signal when reserves are growing scarce
- Fed can still do repos to add liquidity if needed
- Standing repo, conventional repos can address stress quickly
- Fed rate control tools working well amid recent challenges
The word ‘yet’ is doing a lot of work in that headline. It’s remarkable how quickly the talk shifts to QE when there is stress in the market.
As for bonds, US 10-year yields are down 8.3 bps today to 4.70% after falling as low as 4.624%.
US 10 year yields daily