In the U.S. Treasury’s Federal debt market, total debt reached $40 trillion 45 days ago, on Aug. 18. It is already more than a quarter of the way to $41 trillion; and within that market, the “repo,” or repurchase agreement market—run by hedge funds (borrowers), Wall Street banks and and money-market funds (lenders)—has ballooned to more than $13.5 trillion in daily trading, from “just” $4 trillion in mid-2022. Treasury securities collateralize 70% of this furious trading.

Without attempting an explanation of the innards of this repo market, suffice it to say that it is a derivatives market which froze up in mid-September 2019, requiring the Federal Reserve instantly and “unexpectedly” to start what was then called “QE4”; and then froze up again in March of 2020, requiring what came to be called, sarcastically, “QE Infinity,” which brought the Fed to its peak (so far) balance sheet holdings of just under $9 trillion in September 2022. It is still at just under $7 trillion.