Core Insights - The U.S. banking sector borrowed $6.5 billion from the Federal Reserve's Standing Repo Facility (SRF) on Wednesday, indicating tightening liquidity to meet large Treasury settlement demands this week [1] - The borrowing amount set a new record for daily borrowing by banks from the Federal Reserve since the COVID-19 pandemic [1] - General collateral (GC) repo rates peaked at 4.36% on Wednesday, closing at 4.12%, which is unusual as it is not the end of the month or quarter when repo rates typically spike [1] - A strategist from TD Securities noted that this trend indicates a slow but steady reduction in liquidity, suggesting that the Federal Reserve should pay closer attention if SRF usage continues to rise [1]