At Any Rate: Of funding and refundings

• Funding pressures have been gradually increasing due to various factors such as a new easing cycle by the Fed, rebuilding of tga, and QT draining liquidity from the system.
• Money funds began extending duration and shifting balances, leading to evidence of funding pressures in September which intensified in October.
• Funding markets are becoming more sensitive to incremental collateral adds and repo markets are operating with more frictions, impacting the effectiveness of SRF operations in redistributing reserves and controlling repo rates.

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