Fed liquidity facilities still not showing signs of market tension

While there are signs of tension in the currency markets, they are not making their way to the Federal Reserve liquidity instruments. Daily inflows into the central bank’s reverse repo facility, which takes cash from eligible firms, have been hanging around the $1.5 trillion mark, in line with activity in recent weeks. Moreover, the Fed’s permanent repo facility once again had no buyers on Tuesday for an instrument that provides fast-paced liquidity to eligible financial firms.