Starting March 20, 2023, they’re not playing weekly anymore. Daily 7-day dollar swaps are now on the table. Why? Because liquidity is getting tight, and nobody wants a repeat of the 2008-style margin call apocalypse. These daily injections are meant to keep credit flowing to households and businesses and avoid the kind of silent credit crunch that usually sneaks in through the back door when everyone’s distracted by stock charts and CPI prints.
The move reeks of preemptive damage control. Sure, they’ll call it “boosting liquidity efficiency” and “maintaining financial stability,” but let’s not kid ourselves. If everything were peachy, this kind of coordination wouldn’t be necessary. These swap lines are the plumbing behind the curtain, and if you’re suddenly sending in daily plumbers, it’s probably because the pipes are rattling.
This isn’t new, of course. We’ve seen this play before—in 2008, then again during the COVID crash. Back then, it helped put a lid on dollar funding panic. Now, with banks wobbling and bond markets twitchy, the usual suspects are back, trying to calm nerves without ringing alarm bells.
Markets will likely cheer—because, hey, more liquidity is always good news for the leveraged crowd. But the rest of us should take note. Central banks don’t act together like this unless something’s seriously off behind the scenes.
Watch the dollar, watch the banks. When the firehoses come out, it’s rarely because everything’s fine.
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