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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
FED
Bank reserves and the balance of the Treasury General Account both fell in the week ending May 19 (by a combined $165bln), but other categories more than made up for the decline.
- Most notably, usage of the overnight reverse repo facility is soaring +$93bln last week) and that's likely to continue rising into quarter-end with reserves mounting, but MNI's Policy Team reported on Friday that the Fed appears comfortable with such usage ($369bn in cash drained from the system last Friday via ON RRP, highest since mid-2018, and highest end-week since 2017). As such, the facility is ballooning, but appears to be absorbing system reserves effectively.
Source: NY Fed, MNI
- With the Funds rate relatively well-behaved, our policy team also noted the Fed is likely to wait for now before adjusting ON RRP / IOER, with Federal debt limit considerations potentially playing a potential tweak in coming months. (i.e. not by the June FOMC meeting). And public pronouncements suggest the same, including NY Fed SOMA head Lorie Logan noting that some low/negative money market rates appear "technical in nature".
| Liabilities | Reserves | US Treasury General Account | Reverse Repo | Currency In Circulation | Other |
| Last Week's Net Change (USDbn) | -131.9 | -32.7 | 93.3 | 0.4 | 163.0 |
| 4-Week Net Change (USD bn) | 56.5 | -149.8 | 219.4 | 10.4 | -34.6 |
| Total Holdings (USD bn) | 3824.0 | 866.1 | 522.2 | 2168.6 | 542.0 |
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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