On September 17, 2019, there was a sudden and unexpected spike in interest rates on overnight repurchase agreements (or "repos") – short-term loans between financial institutions. The interest rate on overnight repos in the United States increased from 2.43% on September 16 to 5.25%. During the trading day, interest rates reached 10%. The Federal Reserve Bank of New York injected $75 billion into the repo markets on September 17 and every morning for the rest of the week. On September 19, the Federal Reserve lowered the interest paid on bank reserves. These actions calmed the markets and, by September 20, rates had returned to a stable level. The Federal Reserve Bank of New York continued to regularly provide liquidity to the repo market until June 2020. Economists identified the main cause of the spike as a temporary shortage of cash available in the financial system, caused by the deadline for the payment of quarterly corporate taxes and the issuing of new Treasury securities. (Full article...)
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Hi JBchrch and anyone else interested: a draft blurb for this article is above. Thoughts, comments and edits are welcome. Gog the Mild (talk) 18:47, 11 August 2022 (UTC)