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Fed Halts Balance Sheet Runoff Amid Repo Concerns

11/1/2025

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Summary

Story summary

The Federal Reserve (the Fed) will halt its balance sheet runoff, raising concerns about overnight repo liquidity.
Repo rates remain elevated as analysts expect higher rates in November and December.
Analysts say reinvesting $15 billion monthly from maturing mortgage-backed securities into Treasury bills will stabilize funding rates.
Money market funds gain popularity as stable cash holdings amid rising rates, despite lower yields.

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Story summary

The Federal Reserve (the Fed) will halt its balance sheet runoff, raising concerns about overnight repo liquidity.
Repo rates remain elevated as analysts expect higher rates in November and December.
Analysts say reinvesting $15 billion monthly from maturing mortgage-backed securities into Treasury bills will stabilize funding rates.
Money market funds gain popularity as stable cash holdings amid rising rates, despite lower yields.