What is the reverse repo market and why is it hitting $1T a bad omen for the economy?

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What is the reverse repo market and why is it hitting $1T a bad omen for the economy?

In: Economics

u/Izatch Breaks it down pretty nicely.

>Reverse repo being this high is a bad sign for the economy, and a good sign for GME shareholders (whom this community is comprised of) because our research and analysis of the market has led us to believe that the GME “MOASS” (mother of all short squeezes) will begin in tandem with a financial crisis.
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>What is the repo market
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>The repo market is like a pawn shop for major financial institutions, where they can pawn off assets like treasury bonds in exchange for cash, with the promise to repurchase (hence ‘repo’) the pawned assets in the near future. The reverse repo is the opposite, where you pawn cash for assets, with the promise of “repurchasing” your cash by returning the assets.
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>Why is this post so popular?
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>This reverse repo rate is the highest amount for any non-quarter-end day in the history of the repo market. Its concerning because it implies that investors are unwilling to invest in the stock market (predicting an impending crash), or that inflation might be a bigger issue than the powers-that-be are willing to admit. Regardless of the exact cause; we’ve gone deeper into the “no bueno zone” than ever before. No one can say for sure what comes next, other than that it probably won’t be good.

[https://www.reddit.com/r/Superstonk/comments/osr7xz/daily_reverse_repo_update_0727_927419b/h6qb1aw?utm_source=share&utm_medium=web2x&context=3](https://www.reddit.com/r/Superstonk/comments/osr7xz/daily_reverse_repo_update_0727_927419b/h6qb1aw?utm_source=share&utm_medium=web2x&context=3)