Fed’s Nearly Empty Reverse Repo Facility Puts Focus on Reserves

Funds parked at a major Federal Reserve facility dropped to the lowest level in more than four years, putting in focus the amount of cash banks have sitting at the US central bank, a measure of liquidity conditions.

Some 14 participants on Thursday put a combined $28.8 billion at the Fed’s overnight reverse repurchase agreement facility, known as the RRP, which is used by banks, government-sponsored enterprises and money-market mutual funds to earn interest on cash lent to the central bank. It’s the lowest since April 2021, according to New York Fed data. The number of bidders was also the ...