How Hedge Funds Are Trading the Fed Reserve Plumbing Shift

Kevin Warsh's potential Fed changes could reshape how hedge funds trade short-term rates, repo, and Treasury collateral. Lucas and Luna break down the plumbing reform that matters more than the rate decision: the shift away from ample reserves and what it means for basis trades, IORB, and SOFR. With the VIX at 16.68 and small caps surging 3.4% in a week, they explore how a less iron-fisted Fed could create new arbitrage opportunities—and risks. Specific examples include the Legacy of the 2019 repo spike, the current interest on reserve balances at 3.65%, and why funds are already repositioning for a regime change in money markets. #HedgeFunds #FederalReserve #KevinWarsh #RepoMarket #MoneyMarket #BasisTrade #SOFR #IORB #TreasuryCollateral #Plumbing #RegimeChange #Arbitrage #Finance #Investing #Macro #FexingoBusiness #BusinessPodcast #AlternativeInvestments Keep every episode free: buymeacoffee.com/fexingo