Repo Crisis Looms: Fed's Reverse Repo Usage Soars To $351BN, Fifth Highest Ever

This, much more than any flip-flopping commentary from the Fed, confirms that we are rapidly approaching D-Day for the Fed when the central bank will no longer be able to conduct $120BN in QE every month - simply because there is no place to park the hundreds of billions in reserves created out of thin air every month - as sooner or later someone will figure out that the Fed is buying up debt only to turn around and repo out the resulting reserves each and every day, amounting to outright debt monetization with potentially calamitous consequences for yields and the US dollar.

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