The dollar index is climbing as the US faces its longest government shutdown on record. The 
SOFR rate is trading 0.23 percentage points above the IORB , signaling a liquidity shortage. Unfortunately, TradingView data doesn’t cover the 2019 liquidity crunch, but the current situation looks similar.
Earlier this week, Logan highlighted the elevated repo rate and noted that the Fed may need to step in and purchase assets if conditions persist. The liquidity shortage is putting upward pressure on the dollar index. A breakout above 101 could accelerate that pressure further.
If the US shutdown ends, renewed government spending could ease the liquidity strain, allowing the dollar to retreat. Until then, upward momentum is likely to continue.
SOFR rate is trading 0.23 percentage points above the IORB , signaling a liquidity shortage. Unfortunately, TradingView data doesn’t cover the 2019 liquidity crunch, but the current situation looks similar.Earlier this week, Logan highlighted the elevated repo rate and noted that the Fed may need to step in and purchase assets if conditions persist. The liquidity shortage is putting upward pressure on the dollar index. A breakout above 101 could accelerate that pressure further.
If the US shutdown ends, renewed government spending could ease the liquidity strain, allowing the dollar to retreat. Until then, upward momentum is likely to continue.
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