The Fed may need to act as potential trouble brews in a key corner of the financial market | Crypto Craft

  • The Fed may need to act as potential trouble brews in a key corner of the financial market

    From morningstar.com

    Potential signs of trouble are popping up again in the form of tighter conditions in short-term funding markets, which act as the indoor plumbing of the financial system, and this may require the Federal Reserve to take action relatively soon.Two measures of funding-market liquidity, known as the Secured Overnight Financing Rate and the Tri-Party General Collateral Rate, have both crept back above 4% during the past week, but remain off their late-October peaks. Both rates are derived from the U.S. overnight repo market, which acts a critical source of short-term funding for a wide range of financial institutions. ... (full story)

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DwnUndrTrdr
Dec 3, 2025 3:38am
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Quoting Trader#A306
Stupid article: potential troubles constantly brew in all corners of the financial market.
Yeah, who wants to read about potential troubles in the market and apply some form of analysis and due diligence to said potential problems.
More the question, why did you even read the bloody “stupid” article!
Vancarbon
Dec 3, 2025 2:52am
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The bottom line is "liquidity conditions are tighter than they've been in recent years, so small shifts in supply and demand can create more visible volatility in money-market rates. That's not unusual, but it feels more dramatic because we've gotten used to extremely stable rates in a world of abundant liquidity."

That’s the problem.

There’s stress in the system

Funding markets, which are designed to ensure a smooth and continuous flow of capital, experienced periodic strains in September, as well as at the end of October and November. Tighter conditions in these markets serve as a warning of reduced liquidity and the potential for broader market disruptions. Concerns now are that liquidity strains may keep coming back despite the end of the Fed's balance-sheet reduction efforts, which should theoretically be injecting more liquidity into markets. The pressure now being seen in funding markets, which coincided with the end of November, suggests that reserves are no longer abundant and "may even be scratching the surface of 'ample,'" said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities in New York. TD sees a rising risk that, in January or potentially even sooner, the Fed will need to announce reserve management purchases - which involve central-bank purchases of Treasury bills as a way to inject more liquidity into the financial system.
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Doncuan
Dec 3, 2025 1:17am
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yes, its mean time to short selling XAUUSD.
Reply
Trader#A306
Dec 3, 2025 12:01am
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Stupid article: potential troubles constantly brew in all corners of the financial market.
Reply

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