Fear the Repo
tightness in the overnight repo rate and the wild bubble in bonds is saying something, if you're listening.
My take is that it is saying that the endgame from when Ronald Reagan* first declared war on the middle class and set off the Age of Asset Inflation is drawing nigh.
The market prefers liquidity and safety over all the other overpriced assets on offer.
In that case the appetite for liquidity will be endless and insatiable.
CBs will, of course try to feed it.
That's a really dour, downright ugly scenario to ponder.
*plenty of other folks hitched themselves to that wagon if you prefer to blame them. But that's where the neo-liberal game got rolling.