Repo- A few questions [closed]

Question

A few questions which could be related to each other, to help me gain familiarity with repo. These are accompanied with my guess. If anyone can explain in layman's terms (this is new to me).

1) I read on Risk.net The FED now bails out the repo market every day. Can anyone explain what this means, in what form is this done? To what extent is this sustainable? Can this hurt the tax-payer? Is this a matter of buying (back) US debt from the market?

2) I do not understand the jargon The FED pumps money in the market. How is this concretely done? Is this overnight FED purchase of US debt?

3) What is the role of the FED's open market trading desk? Is this to meet the FED's target rate? I though the FED only hiked/cut rate one FED meeting dates (not on a daily basis).

4) What are the FED's term operations, and the FED's overnight operations? The later is, I guess, US Treasuries purchase by the FED?

5) What is overnight funding? My understanding is that hedge funds are key players, in what manner?

6) What is the link between corporate tax payments and the repo market? Is it the case that Corporates presumably need cash on tax dates (to pay tax) and that drives the repo rate higher? And only for one single day (4 times a year)?

7) What is the link between excess reserves and the repo market? What is the incentive for high excess reserves? This presumably creates cash scarcity prompting a higher repo rate?

Answer 1

FRB NY website would be a good place to start answering those questions given they implement the bailouts/money pumping/OMOs + TOMOs.

As to 6), corporate treasurers invest cash in the money market via money market funds (MMFs). When that cash is needed, e.g. for a tax payment, they will withdraw money from the MMFs which, all else equal, will put upward pressure on rates as they sell bills or commercial paper.