Follow the money they say
Posted: October 26th, 2025, 9:36 pm
A good start is to follow these > 2 trillion dollars in ON RRP that now has left FED
The SOFR–IORB spread is now flashing red, signaling growing liquidity stress.
Normally the FED could have lowered the ON RRP rate so that big financial institutions would withdraw deposits and put them to work. But as posted above the ON RRP buffer is already gone.
Sure FED can stop their QT, or they can use other tools, we will see if they are fast enough..
Or what do you all think will happen? How are your hedges? Well trimmed?
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