Dropping Like a Stone: ON RRP Take-up in the Second Half of 2023

Gara Afonso, Marco Cipriani and Gabriele La Spada

No 20231219, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Take-up at the Overnight Reverse Repo Facility (ON RRP) has halved over the past six months, declining by more than $1 trillion since June 2023. This steady decrease follows a rapid increase from close to zero in early 2021 to $2.2 trillion in December 2022, and a period of relatively stable balances during the first half of 2023. In this post, we interpret the recent drop in ON RRP take-up through the lens of the channels that we identify in our recent Staff Report as driving its initial increase.

Keywords: overnight reverse repo (ON RRP) facility; Federal Reserve Balance Sheet; ample reserves (search for similar items in EconPapers)
JEL-codes: E52 (search for similar items in EconPapers)
Date: 2023-12-19
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