Podcast: Where Money Market Funds And The Repo Market Intersect (09 - 23 - 2019)
Money market funds are investment vehicles that invest in debt securities with short maturities and minimal credit risk. They are a significant source of cash for the repo markets, where a money market fund or other asset manager lends cash to a broker-dealer or hedge fund in exchange for securities, often Treasury notes. Last week, a confluence of events negatively affected liquidity in the repo markets; a change in the availability of cash to lend caused market rates to nearly double and significant funds to be withdrawn from money market funds. A series of operations by the Federal Reserve…
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