this collateral (US Treasury bonds) can then be used on wholesale debt markets to issue more credit moreover, this collateral can be leveraged/rehypothecated, thus increasing liquidity still, in the USA the Fed continues to dominate in importance

Illya Gerasymchuk 2025-08-16 11:43

so it may not only be central bank setting the rates and affecting liquidity for example, when US Treasury auctions bonds, they're both, temporarily reducing the effective amount of USD in circulation and providing more high-quanlity collateral