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Chair Powell Asked His View On The Overnight Reverse Repo Facility

FED
  • Q: How do you view the overnight reverse repo facility?
  • A: We looked at that very carefully. When there were big deposit outflows (that have stabilized now), institutional investors took their uninsured deposits and put them in money market funds etc. Retail investors have been moving their deposits into higher yielding accounts, a process that's quite natural in a tightening cycle. What was unusual was institutional investors moving their uninsured deposits and spreading them around. It doesn't seem to have had any effect overall on the overnight repo facility. That's there to help us keep rates where they are supposed to be. And it is serving that purpose very well.

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