Collateral reuse in repo markets helps entities meet short-term funding needs, maintain market efficiency, and anchor collateral valuations, although it creates risks through interconnectedness. A prominent view in the literature is that securities dealers use their market position to obtain temporary free-cash wedges from differences in collateral requirements when reusing collateral, so-called “liquidity windfalls”. By affecting dealers’ funding structures, such windfalls could influence yield curve determination, leverage, and monetary policy transmission.

Banks trade off short-term losses on deposits against long-term profits from cross-selling other products to new depositors. This strategy is especially attractive when policy rates are low and future sales are more valuable. Therefore, deposit rates move less than policy rates: banks keep them relatively higher when policy rates fall, and relatively lower when policy rates rise. As returns on other financial assets follow policy rates more closely, this makes deposits relatively less attractive for depositors at higher policy rates.

Passengers walk through the Ronald Reagan Washington National Airport on Nov. 7, 2025. Anna Moneymaker/Getty ImagesMajor airports across the United States were subject to a 4% reduction in flights on Nov. 7, 2025, as the government shutdown began to affect travelers.

Sharp spikes in calls for food assistance are rare outside of natural disasters. AP Photo/Eric GayBetween January and mid-October 2025, calls to local 211 helplines from people seeking food pantries in their community held steady at nearly 1,000 calls per day.