Liquidity Drop Raises Concerns as Markets Tumble and Deficits Swell
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Funds parked at Fed's overnight repo facility have dropped sharply from $2.5 trillion to $1.1 trillion.
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Signals a major source of liquidity for buying Treasuries has dwindled.
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Comes as S&P 500 falls into correction territory and Fed is expected to hold rates steady.
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Treasury stepping up debt issuance to fund large federal budget deficit.
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Stocks and bonds have been volatile as Fed signals rates will stay higher for longer.