How the Fed’s Overnight Reverse Repo Facility Works

Afonso, Gara; Logan, Lorie; Martin, Antoine; Riordan, Will; Zobel, Patricia

Discussion Paper

How the Fed’s Overnight Reverse Repo Facility Works

Abstract: Daily take-up at the overnight reverse repo (ON RRP) facility increased from less than $1 billion in early March 2021 to just under $2 trillion on December 31, 2021. In the second post in this series, we take a closer look at this important tool in the Federal Reserve’s monetary policy implementation framework and discuss the factors behind the recent increase in volume.

Keywords: overnight reverse repo (ON RRP); monetary policy implementation;

JEL Classification: E52; E58;