Illya Gerasymchuk
Entrepreneur / Engineer
current SRF minimum bid rate is 4.5%
that's the annualized rate that the federal reserve sets requires dor overnight repo loans via Standing Repo Facility
dealers/market makers can borrow cash against US treasuries for 1 day at ≈4.5% annualized directly from the FED
in practice, FED's SRF is used when there is a scarcity of liquidity/cash
the market has US bonds & needs cash, so lenders increase rates
SRF sets a daily rate. if that rate is smaller than in the smaller repo market - the dealers instead borrow USD directly from the FED
