Repurchase operations in the bond market sent the overnight repo rate to as high as 8.5%, while the Fed’s own funds rate hit the top end of the current target range of 2.25%. An unfortunate...

Repurchase operations in the bond market sent the overnight repo rate to as high as 8.5%, while the Fed’s own funds rate hit the top end of the current target range of 2.25%. An unfortunate convergence of events, including an exceptionally large demand for cash from US companies that needed to pay their corporate tax bills, sucked a lot of the available cash out of the financial markets.