Fed Seen Doubling Reverse Repos to Raise Interest Rates

The Federal Reserve will have to double its borrowing through overnight reverse repurchase agreements in order to raise its benchmark interest rate from near zero, according to economists surveyed by Bloomberg.

Some 61 percent of 43 economists in the survey said the Fed would have to borrow more than $250 billion per day on average through its overnight reverse repo facility to sustain a floor under the federal funds rate at liftoff, more than double the $120.3 billion daily average logged in 2014 as the central bank has tested the facility. The survey was conducted Sept. 11-15.