Fed doesn’t want another repo crisis, but treasury isn’t helping

Bloomberg/Liz McCormick and Saleha Mosin/2-18-2020

“As the [Treasury] department copes with higher spending, large swings in the amount of money it has on deposit with the central bank have already undercut the Fed’s ability to keep bank reserves stable. Last year, one particularly big shift helped to drain so much liquidity from the banking system that it contributed to a spike in overnight lending rates.”

USAGOLD note:  One thing leads to another for the Treasury Department and central bank.  A bunch of little things pile up.  And then all of a sudden something big happens and you find out your sitting atop a genuine, full-out crisis.