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US TSYS/OVERNIGHT REPO: ON RRP Usage Lifts Modestly Heading Towards Month-End

US TSYS/OVERNIGHT REPO
USBulletMarketsFixed Income BulletsNorth America
  • Take-up of the Fed's overnight reverse repo facility increased $21bn to $169.8bn today, lifting from levels close to the recent lows of $144bn from Nov 5.
  • Usage could increase more notably at month-end.
  • The number of counterparties fell further to 49 from 51 yesterday and 57 on Monday. That’s the lowest since Nov 1.
  • On a related note from Wednesday’s FOMC minutes: Staff recommendations: “The first consideration focused on the possibility of a technical adjustment to the ON RRP offering rate. […] The staff also noted that lowering the ON RRP offering rate 5 basis points would align the ON RRP offering rate with the bottom of the target range for the federal funds rate and would probably put some downward pressure on other money market rates”
  • “Some participants remarked that, at a future meeting, there would be value in the Committee considering a technical adjustment to the rate offered at the ON RRP facility to set the rate equal to the bottom of the target range for the federal funds rate, thereby bringing the rate back into an alignment that had existed when the facility was established as a monetary policy tool.”
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  • Take-up of the Fed's overnight reverse repo facility increased $21bn to $169.8bn today, lifting from levels close to the recent lows of $144bn from Nov 5.
  • Usage could increase more notably at month-end.
  • The number of counterparties fell further to 49 from 51 yesterday and 57 on Monday. That’s the lowest since Nov 1.
  • On a related note from Wednesday’s FOMC minutes: Staff recommendations: “The first consideration focused on the possibility of a technical adjustment to the ON RRP offering rate. […] The staff also noted that lowering the ON RRP offering rate 5 basis points would align the ON RRP offering rate with the bottom of the target range for the federal funds rate and would probably put some downward pressure on other money market rates”
  • “Some participants remarked that, at a future meeting, there would be value in the Committee considering a technical adjustment to the rate offered at the ON RRP facility to set the rate equal to the bottom of the target range for the federal funds rate, thereby bringing the rate back into an alignment that had existed when the facility was established as a monetary policy tool.”