Repo Market: Why Banks Took a Record $74.6 Billion From the Fed

On the last day of 2025, the largest banks in America drew $74.6 billion in a single day from the Federal Reserve’s standing repo facility, its emergency cash window. That was a record for a year-end, and reporters at the time compared it to the repo market blowup of September 2019.

A version of this story going around claims the Fed was “25 minutes late” during an emergency and that a buried footnote proves it. The video went looking and could not find that claim anywhere in the public record. What it did find, in a New York Fed research paper from May 2026, is a number that explains why emergency help tends to arrive late. Here is what the documents actually show.

How does the overnight lending market work?

Banks lend cash to each other overnight, every night. One bank ends the day with spare cash and another is short, so the first lends to the second and is repaid the next morning. That market keeps the financial system running, and it depends on trust and timing.

The price of those overnight loans moves with supply and demand. When many banks are short of cash at the same time, the price spikes. If it spikes enough, banks stop lending to each other and turn to the Fed.

The Fed’s tool for that moment is the standing repo facility. A bank hands the Fed Treasury bonds, the Fed hands back cash, and the next day the bank returns the cash with a small fee and gets its bonds back. The Fed built it after 2019 specifically so it would never have to scramble the way it did then.

Where did the cash cushion go?

For the system to run smoothly, there needs to be a cushion of spare cash. That cushion used to be enormous. Large money market funds parked hundreds of billions of dollars at the Fed every night through its overnight reverse repo facility (ON RRP).

According to the video, by mid-September this year the facility held somewhere between $432 million and $576 million. That is millions, not billions. The spare cash has drained out.

The Fed saw this coming. It stopped shrinking its own bond holdings on December 1, 2025, because bank reserves had fallen to what it called “ample.” The video stresses the word: ample, not comfortable.

Why does the Fed’s help arrive late?

Because banks hesitate to use it. In May 2026, New York Fed researchers published a paper on why banks do not use the emergency window the moment they need it. They found what they call a hurdle spread:

• Primary dealers wait until the normal overnight rate runs about a tenth of a percentage point above the Fed’s posted rate before they will use the window.
• Banks have a wider median hurdle, at 25 basis points (a quarter of a percentage point).

The Fed’s window can be the cheaper option, and banks still wait. The video’s explanation is stigma. Even after the Fed renamed the facility and removed its overall borrowing cap, using it tells the market a bank got caught short. The video compares it to calling every friend you have before making the one call that admits you are short of money.

Roberto Perli, who runs the New York Fed’s market operations desk, has said publicly that banks should use the window when it makes sense. The video’s point is that he has to say it at all.

So, in the video’s words, the rescue is not late because of a clock or a plot. It is late because of a number nobody wants to talk about.

What do the dated records show?

A pattern of growing draws on the window:

Date	Single-day draw on the standing repo facility
Mid-September 2025	$18.5 billion, at the time the largest since the facility was built
Late October 2025	Two operations in one day, between $29 billion and $50 billion depending on the report
Late November 2025	Still elevated, around $24 billion
December 31, 2025	$74.6 billion, a year-end record

The video notes that sources disagree on the October figure, so it gives the range rather than a single number.

Alongside that, since January 2025 the overnight rate banks charge each other has broken above the Fed’s own posted ceiling on 17 separate dates. The Fed sets the ceiling, and the market has gone through it 17 times.

Why does this matter beyond the banks?

Because of the size of the government’s borrowing. According to the video, the government is rolling over about a third of its entire debt this year, roughly $10 trillion. About $7 trillion is short-term bills and about $3 trillion is notes and bonds. All of it has to be repaid and replaced with new debt at today’s higher interest rates, and every extra percentage point of interest on that amount is money that cannot go anywhere else.

The video also points to the Treasury stepping into its own market. On September 9, the Treasury doubled its buybacks of longer-dated bonds, from a $2 billion cap to at least $4 billion per operation.

Isn’t the Fed in control of this?

The video gives the reassuring case properly, and calls it stronger than many want to admit:

• The Fed ended its balance sheet reduction in December 2025.
• It has been buying short-term government debt again to keep the cushion from vanishing.
• It removed the overall borrowing cap on the standing repo facility in December 2025. Each bank can now bid up to $40 billion per security type in each of the two daily operations.
• If conditions worsen, it can buy bonds, cut rates or widen the window, and in past episodes it has stepped in and the market recovered.

Where the video says that argument breaks down is that every backstop depends on banks actually using it, and the research shows they do not, at least not quickly. The hurdle spread is a choice banks make, not a rate the Fed sets. A bigger window is not the same as banks walking through it. And the 2019 fix was meant to be a spare tire; it is now being used far more than planned.

A 30-second check on your own cash

The video suggests a simple exercise. Think of the largest pool of money you keep somewhere safe, such as a savings account, money market account or short-term bond. Then ask: if you needed that money on a Friday afternoon and were told “Monday,” could you still pay this weekend’s bills?

Many people cannot answer without checking. That gap between owning something and being able to use it is, in the video’s framing, the same gap banks hit at a far larger scale whenever the overnight market spikes. They own the bonds; they just cannot turn them into cash fast enough.

What to watch next

The video’s public record, all available free, comes down to six items worth following:

1. The ON RRP balance, now in the hundreds of millions rather than hundreds of billions.
2. Standing repo facility draws, especially around quarter-ends and year-end. The last year-end produced a record.
3. Days when the overnight rate breaks the Fed’s ceiling, 17 since January 2025.
4. New York Fed research and statements on the hurdle spread and use of the window.
5. Treasury refinancing, with roughly $10 trillion maturing this year.
6. Treasury buybacks, doubled on September 9.

The video is explicit that none of this proves a crisis is coming, and it makes no prediction about prices. It describes the data as a measurement: the system is running on its thinnest cushion in years and leaning on its last line of defense more than its designers expected.