The US repo market spike - it's only a flesh wound

Summary:

The US repo rate spike over the turn is no sign of an impending money market crunch like we experienced in 2019. Unlike in 2019, there is no shortage of bank reserves, and settlement of the federal funds rate has remained low. Furthermore, there is plenty  of cash left in the Fed’s reverse repo facility, which should move to the repo market. Finally, unlike in 2019, the Fed has put a repo market backstop in place, even if it is an imperfect one.