According to BlockBeats, data from the Federal Reserve Bank of New York shows that the Secured Overnight Financing Rate (SOFR) rose to 5.4% on July 3rd, matching the six-year high set on January 2nd. This rate represents the cost of banks borrowing cash overnight using U.S. Treasury bonds as collateral. The increase indicates a tightening of liquidity and restrictions on overnight borrowing, a market dynamic last seen in September 2019. Following this, the Federal Reserve injected liquidity into the repo market, where institutions borrow and lend funds short-term using U.S. Treasury bonds as collateral.David Brickell, an executive at Toronto-based crypto platform FRNT Financial, stated that this situation is a short-term concern for the market. There may be some financing pressure after the end of the second quarter. However, this reminds us of the surge in repo financing rates we experienced in 2019. We are beginning to see the pressure of excessive government debt and Treasury bond issuance. Ultimately, the Federal Reserve will need to end quantitative tightening or balance sheet contraction and restart liquidity injections similar to quantitative easing. Without the Federal Reserve's liquidity, the financial system cannot digest this level of debt. Ultimately, the Federal Reserve will quickly return to balance sheet expansion mode, acting as the last provider of liquidity.