On The Verge Of A Funding Crisis: Fed's Emergency Liquidity Facility Unexpectedly Soars Most Since COVID

And just like that, the market finds itself on the verge of another funding crisis. 

But let's back up: a few days after the Fed cut rates in September (but without Powell committing to more rate cuts, which is why some in the market viewed the FOMC decision incorrectly as a hawkish cut) we said that the conversation whether the Fed will cut and how much, is moot for a very simple reason: Fed reserves had just fallen below $3 trillion, a level which most Fed officials view as the red line between "abundant" to "scarce" reserves (for those unfamiliar, when reserves become "scarce", banks fail, repo markets go haywire, and generally the market crashes, so it's largely viewed in a negative light except by the bears).