Basically, there’s too much cash/fiat in the system. So in order to keep their balance sheets... balanced, they need collateral. There’s a lack of collateral, so they’re having to use the FED’s RRP, which essentially means they park their $$$ for treasury bonds overnight... every night.
Can you break that down for us crayon eating apes?
Basically, there’s too much cash/fiat in the system. So in order to keep their balance sheets... balanced, they need collateral. There’s a lack of collateral, so they’re having to use the FED’s RRP, which essentially means they park their $$$ for treasury bonds overnight... every night.