Question

Analyse the performance of the repo rate for the past 10 years

Answer 1

Us Treasury repo rate has been on a rise from 2010 to 2018 from .50 percent to 2.50 percent. But since year 2018 to 2020 it has been on a continuous decline from 2.5 percent to 1.2 percent as change in repo have long term effects on the economy.

U.S Treasury has cut has repo rate after 2008 crisis as an immediate measure to control overall economic Carnage .Once the economy recovered and it started to curb inflation by raising repos .

Since the mid of 2018 , FED was forced by regular intervention of president to cut the repos in order to inflate more demand but it has created a havoc in early 2020 by arrival of Covid 19 and fed has again slashed it's rate by 100 basis points to counter an impending recession.