The US Fed has succeeded in flooding market with cash. U.S. commercial bank deposits grew by more than $420b from the end of February to March 18—an extraordinary amount that puts March on track for a year’s worth of deposit growth, according to Brian Foran of Autonomous Research.
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Now the banks’ problem is too much cash
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One consequence has been that repurchase agreement or repo rates are calm. Trends in repo indicate “cash supply is abundant,” analysts at KBW wrote. Created with Highcharts 6.1.1
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