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Be Very Afraid: $1.4 Trillion Of Excess Bank Reserves And 10% Repo Don’t Compute

Summary:
Yet while the book has yet to be written on the causes for last week's shocking move higher in repo rates, which sent general collateral as high as 10%, a record print in a time of .4 trillion in excess reserves, we can shed some clarity on the definition of "reserves." While there is a universe of semantic gymnastics when it comes to explaining what reserves are, the  most basic definition is quite simply "cash", however not cash in circulation but rather cash (and deposits) held in the bank's account with the Federal Reserve (which the US central bank's name comes from). https://www.zerohedge.com/markets/these-are-banks-where-feds-14-trillion-reserves-are-parked

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Yet while the book has yet to be written on the causes for last week's shocking move higher in repo rates, which sent general collateral as high as 10%, a record print in a time of $1.4 trillion in excess reserves, we can shed some clarity on the definition of "reserves." While there is a universe of semantic gymnastics when it comes to explaining what reserves are, the  most basic definition is quite simply "cash", however not cash in circulation but rather cash (and deposits) held in the bank's account with the Federal Reserve (which the US central bank's name comes from).

https://www.zerohedge.com/markets/these-are-banks-where-feds-14-trillion-reserves-are-parked

David Stockman
David Alan Stockman (born November 10, 1946) is a former businessman and U.S. politician who served as a Republican U.S. Representative from the state of Michigan (1977–1981) and as the Director of the Office of Management and Budget (1981–1985) under President Ronald Reagan.

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