Part 3/11:
The Surge on October 31st: A Sign of Escalating Instability
What stood out this Friday was the rapid and unprecedented increase in repo operations. Morning data showed roughly $4.4 billion in US Treasuries and almost $16 billion in mortgage-backed securities borrowed via repo, amounts that previously would have raised eyebrows.
But the real shock came from the afternoon swell: repo borrowing exploded to over $50 billion, with $25 billion in Treasury securities and an additional $5 billion in mortgage-backed securities borrowed in a single session—the largest ever seen.