CD Media
Markets

Fed’s Reverse Repo Soars To Stunning $756 Billion, Spikes By $230 Billion Overnight

Please Follow us on Gab, Minds, Telegram, Rumble, Gab TV

While it received far less attention that the Fed’s dot plot, the only thing that the Fed actually did change yesterday were its administered rates, as it raised the rate on its overnight Reverse Repo facility from 0% to 0.05% and the rate on excess reserves (IOER) from 0.10% to 0.15%.

Since the RRP hike meant the GC rate would also have to increase, we noted last night that “with both market rates and RRP at .05%, there’s really no economic incentive for cash investors to move cash to the Repo market.”

Furthermore, now that the Fed is actually paying counterparties a modest but non-negligible 5bps on reserve deposits, it has made the RRP even more attractive compared to when it paid nothing (when the RRP rate was 0.0%), as it now generates a higher risk free yield than many short-term Bills…

To read more visit Zero Hedge.

CDMedia is being targeted and obviously too effective! We need your support to put more reporters in the field! Help us here! 

Related posts

Approaching Winter Season Provides Little Support For Asian Spot LNG Prices

Tim Daiss

Pelosi Plays Politics, Says She Can’t Meet Trump This Week On Stimulus, Markets Crash

CD Media Staff

The Donald Suggests The Fed Reduce Rates By 1%, Enact More QE, In Order To Deal With Debt

CD Media Staff

Leave a Comment

Subscribe to our evening newsletter to stay informed during these challenging times!!

Clicky