Repo Spike 2019
Mid-September 2019 US GC/SOFR printed in the double digits for a day as reserves met a tax date and bill supply — a plumbing scare that created the standing repo facility debate.
Definition
Not a solvency crisis. A quantity-of-reserves and dealer-balance-sheet event: corporate tax outflow plus settlement of a large bill auction left the system short of reserve-like claims. GC went to 8–10%. The Fed returned to reserve injections and later built the SRF.
Why it matters
It showed QT can go too far even with ‘abundant’ language. The 2020 dash-for-cash had a cousin here.
Case
16–17 September 2019. Intraday Fed ops, then term and overnight repo, then T-bill purchases. The SRF (2021) is the structural patch.
How to read it
Watch TGA, bill supply, and reserve scarcity indicators — not just the funds-rate target. The target can be fine while GC is not.
Key papers
Landmark references with real publisher or arXiv links — not token-overlap noise.
- Monetary Policy Implementation with an Ample-Reserves RegimeYourkevich / NY Fed explainers · 2020 · Federal Reserve Bank of New YorkContext on ample reserves after 2019.