U.S. banks borrowed $1.5 billion from the Federal Reserve’s Standing Repo Facility on Monday to meet funding obligations for quarterly corporate tax payments. The SRF provides overnight cash in exchange for eligible collateral like Treasuries, established in July 2021 post-pandemic. Settlements for Treasury securities and corporate taxes on Monday totaled roughly $78 billion, pushing the U.S. Treasury’s cash balance over $870 billion. SOFR rose to 4.42%, exceeding the Interest on Reserve Balances of 4.40%, indicating high demand for secured funding against Treasuries. Analysts believe this liquidity pressure is temporary, with the Fed offering more cash in the afternoon. Financial institutions borrowed $11.1 billion from the SRF on June 30, the largest amount in four years.

Read more at Yahoo Finance: US banks borrow $1.5 billion from Fed’s repo facility in sign of minor funding pressure