Briefing
The Borrower of Last Resort: What Explains the Rise of ON RRP Facility Usage?
Kirk, Kyler; Wong, Russell (2021-12)
This article explains why the Fed has been borrowing more than $1.4 trillion from its borrower-of-last-resort facility: the Overnight Reverse Repo. We compare the roles of five channels potentially driving Fed borrowing (such as saving glut, quantitative easing, regulation, etc.) and find that one channel — the Treasury General Account drawdown — is associated with most of the current usage. We also find this channel's impact could be partially moderated if the Fed tapers quantitative easing accordingly.
Richmond Fed Economic Brief , Volume 21 , Issue 43