Federal Reserve's Overnight Reverse Repo Usage Hits Near Four-Year Low

Feb 12, 2025

The usage of the Federal Reserve's Overnight Reverse Repurchase (RRP) agreements has continued to decline, reaching its lowest level in nearly four years. On Wednesday, approximately 27 counterparties deposited $67.7 billion through RRP, marking a decrease from $76.4 billion the previous day. This is the lowest level since April 2021.

Federal Reserve Chair Jerome Powell addressed the House Financial Services Committee, stating that balance sheet reduction will continue for some time. His comments underline the ongoing efforts by the Federal Reserve to manage liquidity and control inflation by gradually reducing its balance sheet.

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