US Fed's Reverse Repo Facility [OC]Submitted by rosetechnology t3_y6bzk0 in dataisbeautiful
mikey_the_kid t1_isozrg5 wrote
Reply to comment by 685327594 in US Fed's Reverse Repo Facility [OC] by rosetechnology
Banks have lots of liquidity, they park their money here in a reverse repo with the fed, the fed pays interest to the bank on the reverse repo. The federal funds rate has been going up. Reverse repo rate is tied to the FFR, so the interest payments to the banks have been going up.
Why do banks park money in these agreements? No better risk-reward options out there. They are acting rationally.
OldmanRepo t1_isputcm wrote
Banks don’t use the RRP, there usage is under 1% historically and basically zero lately. You can look at the historical data and see this. I haven’t updated this pic in awhile but you’ll get the point…
[deleted] t1_ispy7cu wrote
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