Barclays: If the repurchase Intrerest Rate remains high, the Fed may need to intervene.

GateNews

Golden Finance reported that if the buyback protocol Intrerest Rate rises above the effective federal funds rate target range, or just at the upper end, and remains there for several weeks, policymakers may need to make adjustments, Barclays strategist Samuel Earl stated in a report. Earl wrote that the repurchase market is an “important driver” of the federal funds Intrerest Rate, and officials need to be concerned about repurchase rates remaining at or even above the upper limit of the range. This means that the Federal Reserve will ultimately need to increase reserves through more repurchase lending or direct purchases of Treasury securities.

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