New York Federal Reserve president John Williams convened a meeting with Wall Street dealers this week over a key short-term lending facility, underscoring officials’ concerns about strains in US money markets. 

The hastily arranged meeting, which has not been previously reported, took place on the sidelines of the Fed’s annual Treasury market conference on Wednesday, according to three people familiar with the matter.

A closely tracked measure of short-term borrowing costs, known as tri-party repo, jumped well above a rate set by the Fed late last month, but then eased back the following week as investors took solace in the central bank’s pledge to stop shrinking its balance sheet on December 1.

Tri-party repo rates have again picked up this week, rising to almost 0.1 percentage points above the Fed’s rate on reserve balances — though they remain lower than at the end of October.

The share of repo transactions taking place at rates above the [interest rate on reserve balances] has reached levels last seen in late 2018 and 2019,” Perli said earlier this week at a New York Fed event.