Fed’s $100 Billion Repo Intervention Falls Short Of Bank Demand. Primary dealers sought $111.48 billion from the central bank!?

Big banks’ demand for central bank cash remained very strong on Wednesday, leading the Federal Reserve Bank to add a fresh $100 billion to the financial system.

The Fed added the money via what’s called an overnight repurchase agreement operation, or repo. Eligible banks, called primary dealers, sought $111.48 billion from the central bank, exceeding the $100 billion cap the Fed places on overnight repos.

The heavy demand for Fed cash reprised the strong interest seen for Fed money on Tuesday, when the Fed added even more money to the financial system. As of Wednesday morning, the total amount of Fed repos outstanding held steady from Tuesday at $195 billion.

Repo outstanding levels had been falling over the recent weeks, but have ticked up over the last two days, although they are still short of the $255.62 billion that was outstanding on Jan. 1.
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