By Michael S. Derby WASHINGTON (Reuters) -Federal Reserve interest rate-control liquidity facilities are set for a heavy-duty workout into the close of the month, with big implications for how much farther the U.S. central bank can take its balance sheet wind-down process. The Fed's reserve repo facility and its still largely untested Standing Repo Facility (SRF) are likely to see major inflows as banks and other firms navigate normal month- and quarter-end volatility, in an environment where central ban ...

By Gertrude Chavez-Dreyfuss NEW YORK (Reuters) - U.S. banks borrowed $1.5 billion from the Federal Reserve's Standing Repo Facility on Monday, the deadline for quarterly corporate tax payments and Treasury debt settlements, Fed data showed, suggesting some tightness in meeting funding obligations. The SRF serves as a backstop for any potential funding shortage. Launched in July 2021 in the aftermath of the Covid-19 pandemic, the Fed's SRF offers daily overnight cash twice a day in exchange for eligible c ...

By Gertrude Chavez-Dreyfuss and Davide Barbuscia NEW YORK (Reuters) -A surge in U.S. Treasury bill issuance in recent months has reduced liquidity in the financial sector, stoking investor concerns that funding markets could face a September squeeze. That could create ripple effects through markets by reducing demand for assets like stocks and corporate bonds, and pushing some investors to set cash on the side in anticipation of volatility. Some say there is a mild risk of a repeat of 2019 when a liquid ...