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MNI BRIEF: Fed Could Again Lift Reverse Repo Cap Limits

WASHINGTON (MNI)

The Federal Reserve signaled in July meeting minutes released Wednesday it could again lift the per-counterparty limit on its overnight reverse repo facility.

"If a number of counterparties reached the per-counterparty limit on their ON RRP investments and downward pressure on overnight rates emerged, it may become appropriate to lift the limit," New York Fed market desk manager Lorie Logan said, according to the minutes.

The Fed raised the per-counterparty cap in March to USD80 billion per day from USD30 billion before. Usage of the central bank's overnight reverse repo facility has surged since administered rates were increased in June, with Wednesday's levels seeing a new record high at USD1.12 trillion.

MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

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