Bond traders have pushed back against Federal Reserve officials urging them to use a key borrowing facility, complicating the central bank’s efforts to ease strains in the $12 trillion market for repurchase agreements.
Primary dealers representing Wall Street banks told the officials at a meeting last week that borrowing directly from the central bank still carries a stigma and could be seen as a sign of trouble.
That’s one reason they’ve been reluctant to use the Standing Repo Facility (SRF), according to people familiar with the discussion, who asked for anonymity to discuss details of private conversations.
Others pointed to ...