Repo Rates Surge as Liquidity Tightens

• Quantitative tightening and high sovereign bond issuance have led to a drop in bank reserves.

• The interest rate the Fed pays banks for holding reserves, known as the Interest On Reserve Balances (IORB), is now lower than the Secured Overnight Financing Rate (SOFR).

• As central banks drain liquidity from the banking system and governments ramp up debt issuance, banks rely on the Fed’s liquidity facilities, and money markets face pressure.

Read in-depth insights in our Fixed Income Credit Markets – November 2025