ACTV - Federal Reserve Watch: Declining Use Of Reverse Repos
2024-03-09 04:12:52 ET
Summary
- The Federal Reserve has used reverse repurchase agreements to manage excess reserves in the commercial banking system.
- The use of reverse repos reached, at one time, approximately $2.6 trillion, but is now around $800 billion.
- This tool helped the Fed continue quantitative tightening while managing the rise in interest rates.
- For the future: the Fed will continue on with its quantitative tightening and, as Fed Chairman Powell stated to Congress this week, interest rates will probably start coming down.
The Federal Reserve has used the tool, reverse repurchase agreements, to manage the excess reserves existing in the commercial banking system....
Federal Reserve Watch: Declining Use Of Reverse Repos