LIQUIDITY KNOWLEDGE BASE
Funding Stress
Pressure in short-term funding and dollar markets.
Definition
Funding stress measures whether cash, repo, and dollar markets are functioning smoothly or becoming expensive and scarce.
Liquidity Rule
Calm funding lets liquidity transmit. Funding stress can block liquidity even when headline cash is improving.
Crypto Impact
High funding stress usually hurts high-beta crypto because leverage and risk appetite become more fragile.
Bullish Setup
SOFR/repo calm, HY spreads stable or tightening, dollar not spiking.
Bearish Setup
Repo/SOFR spikes, HY spreads widen, or dollar/yields jump together.
Common Misunderstanding
Liquidity creation is not enough if the funding gate is closed.
Related
Funding calm = transmission open; funding stress = transmission blocked.