The cost of short-term loans in the repurchase agreement or “repo” market surged earlier than usual into quarter’s end as money-market funds and others, anticipating new regulations, piled into a Federal Reserve facility that typically drains excess cash from Wall Street.
Money-market funds and other eligible investors poured $412.5 billion into the Fed’s overnight repo program Friday, its second-highest balance since the record was set Dec. 31 last year with $474.6 billion, Fed data show. That sapped dollars away from traders and securities dealers who tend to use cash from money-market funds to finance their day-to-day activities.
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