USA fund raising costs have skyrocketed - traders flocking in anticipation of year-end constraints.

November 22, 2024 11:12 JST (excerpt)
Interest rates on overnight general collateral repos and MBS collateral repos have sharply risen.
Moves to prepare for further volatility on Wall Street.

Traders are flocking to the funding markets in the USA, as we are just over a month away from the end of 2024, funding costs have risen to concerning levels.
Interest rates on overnight general collateral repos and mortgage-backed securities (MBS) collateral repos are sharply rising towards the year end. In light of these increases, some participants in the repo market in Wall Street are expected to refrain from trading due to regulatory constraints approaching year end, preparing for further volatility.
Jan Nebulji, the US interest rate strategist at TD Securities, wonders how many years it has been since year-end concerns started incorporating so early, expressing a view that it's clear there are bottlenecks that will worsen as the year-end approaches.