In yet another sign that the Fed is undoubtedly contributing to flaming-hot liquidity levels, latest data from the NY Fed shows that its reverse repo facility hit an astounding and record-breaking $1.604 trillion in usage on Thursday. The overnight repo received funds from 92 counter-parties, which too, is the highest on record.

Although a significant portion of the skyrocketing usage was due to a month and quarter-end scramble— the figure has since dropped to just below $1.4 trillion at the time of writing— it nonetheless attests to a liquidity landscape that is running out of control.

In other, perhaps related news, The Fed’s preferred gauge of America’s inflation levels soared to the highest in 30 years, as an unprecedented demand for goods and services— coupled with global supply chain disruptions— continues to keep prices elevated at historic levels. The personal consumption expenditures price index jumped 0.4% in August and 4.3% from one year ago, marking the highest reading since 1991, as energy prices rose by a staggering 24.9% and food costs jumped 2.8%.

Core PCE, which excludes volatile categories such as food and energy, was up 0.3% month-over-month and increased 3.9% from August 2020. The figure is also the highest since 1991, further proving that inflation is actually a lot more prolonged that the Fed’s initial assertions.

Information for this briefing was found via the NY Fed and the BEA. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.