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Fed Facility Tops $2 Trillion as Investors Scramble to Park Cash

  • RRP balance climbed to an all-time high of $2.045 trillion
  • Cash glut, lack of places to invest continue to drive increase
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WATCH: Jamie Dimon says there are storm clouds over the US economy.Source: Bloomberg
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The amount of money parked at a major Federal Reserve facility climbed to yet another all-time high, surpassing the $2 trillion milestone for the first time, as investors struggled to find places to invest their cash in the short term.  

Money-market funds continue piling into the Fed’s overnight reverse repurchase agreement facility, even as the monetary authority raises interest rates and plans to start unwinding its mammoth balance sheet next month, moves intended to tighten financial conditions and drain the amount of excess liquidity in the financial system. Yet there’s still an imbalance in the Treasury-bill market that as of late has been exacerbated by robust tax collections in the US, and as a result the so-called RRP facility remains a haven for money markets with very few investment options.