The Repo Market's Wild New Year's Eve Was a Dud

In markets, widely watched and well-known events routinely underwhelm. On this final day of 2019, the repurchase agreement (repo) market taught this lesson once again … by doing next to nothing noteworthy. That likely comes as a surprise to many pundits who have been obsessing over short-term interest rates for months. But to us, it is the highly predictable outcome of the Fed returning to what it routinely did for decades before its wrongheaded quantitative easing (QE).