Use of Fed’s RRP Facility Shrinks to Smallest Since April 2021

Balances at the Federal Reserve’s overnight reverse repurchase agreement facility dropped to the lowest level in more than three-and-a-half years as quarterly corporate tax payments and mid-month Treasury auction settlements pulled more cash out of the front end, driving private market rates higher and users away from the central bank.

• On Monday, some 47 counterparties parked $110.8 billion at the RRP, the lowest since April 2021, and down from $135.8 billion the prior session
• A bright spotlight has been cast on the the facility after Fed officials, in the minutes of their November policy meeting, revealed they saw value in ...