Repo Markets and the Fed's Balance Sheet: Implications for Monetary Policy Implementation

Sriya Anbil, Alyssa G. Anderson, Lucy Cordes and Romina Ruprecht
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Sriya Anbil: https://www.federalreserve.gov/econres/sriya-l-anbil.htm
Alyssa G. Anderson: https://www.federalreserve.gov/econres/alyssa-g-anderson.htm

No 2026-08-26-2, FEDS Notes from Board of Governors of the Federal Reserve System (U.S.)

Abstract: As the Federal Reserve (Fed) navigates periods of balance sheet expansion and reduction, it has become increasingly important to understand how changes in the size and composition of Fed assets affect short-term funding markets. The overnight Treasury repo market is central to this relationship since it is a transmission channel through which balance sheet policy can affect money market conditions and, ultimately, the Fed's policy rate, the effective federal funds rate (EFFR).

Date: 2026-08-26
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfn:103714

DOI: 10.17016/2380-7172.4069

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