Fed’s popular repo facility sees record demand of $1.35 trillion Thursday

This system, which permits banks, money-market funds and other financial firms to park money in a single day on the Fed, whereas incomes 5 foundation factors, has turn into more and more in style with Wall Avenue companies flush with money, who’re on the lookout for save, short-term havens to stash it.

Thursday’s operation noticed a record $1.35 trillion parked within the facility from 77 counterparties. The Fed doesn’t instantly disclose the names of particular person customers, however offers further historic information on a delayed foundation.

Expectations have been for demand to ramp greater heading into year-end, given the everyday volatility and liquidity woes that may plague monetary markets, but in addition this 12 months due to the unresolved debt-ceiling issue in Washington, a Treasury-bill market that’s been shrinking this 12 months and anticipated wrangling in Congress over President Biden’s proposed $3.5 trillion spending invoice.

Learn: Fed opens overnight repo spigot as Wall Street stares down barrel of U.S. debt-ceiling fight

U.S. shares climbed Thursday, with the Dow Jones Industrial Common
DJIA,
+1.48%
closing up 500 factors, a day after the Fed mentioned it could announce in November a plan for tapering its $120 billion in month-to-month Treasury
TMUBMUSD10Y,
1.428%
and mortgage-backed securities, and doubtlessly increase benchmark coverage charges at a faster tempo than initially anticipated.