Fed Reverse Repo Balance Drops to $176 Million
The balance of the overnight reverse repo facility held at the Federal Reserve by money market funds has fallen to $176 million, with the buffer completely exhausted.
The balance of the overnight reverse repo facility held at the Federal Reserve by money market funds has fallen to $176 million, with the buffer completely exhausted.
The 99th percentile SOFR transaction rate rose to 4.04%, exceeding the Federal Reserve's 4% window rate, and overnight repo volume rose to $3.147 trillion.
The U.S. PCE price index recorded 3.4% year-on-year in August, coming in below expectations, pushing the probability of an October rate hike even lower, while the 10-year U.S. Treasury yield saw intense tug-of-war intraday.
Federal Reserve Chair Kevin Warsh completed his debut on June 17, with the decision to hold rates steady meeting market expectations. Dovish language was removed from the statement, and half of the officials believe that a rate hike will still be needed in 2026.
The Federal Reserve voted unanimously on Wednesday to raise the federal benchmark interest rate by 25 basis points to between 3.75% and 4%, marking the first hike in three years, aimed at addressing inflation pressures and uncertainties stemming from geopolitical tensions, with most officials planning another rate increase later this year.
The Federal Reserve raised interest rates by 25 basis points at its policy meeting, moving the federal funds rate into a range of 3.75% to 4%, while the 10-year Treasury yield touched 5.3% intraday, its highest level since 2007.
The Federal Reserve announced a 25 basis point rate hike on September 16, pushing the federal funds rate to a range of 3.75% to 4%, marking the first rate hike since July 2023.
Rising inflation forced the Federal Reserve to begin raising interest rates to 3.75%-4% in September, with the 10-year Treasury yield breaking through 5.3%, hitting a new high since 2002.
On the very same day the Treasury Department announced an increase in debt buybacks, the St. Louis Fed President publicly stated that how the Treasury borrows and manages money is its own business, while setting interest rates is the responsibility of the Fed and does not bow to Treasury pressure, highlighting an open clash between the central bank and the Treasury.
On July 8, Bank of America cut its full-year average price to $4,360 and predicted that the Federal Reserve would raise interest rates three consecutive times in the second half of the year.
New Federal Reserve Chair Warsh made his debut last Wednesday, announcing the removal of the interest-rate roadmap forward guidance and the free put-option backstop insurance, and reclaiming operational autonomy.
The Federal Reserve decided at its June meeting to keep the federal funds rate unchanged in the range of 3.5% to 3.75%.
Driven by the non-farm payrolls data release and the negative gamma mechanism, the Nasdaq composite plummeted 4.77% in a single day, wiping out about $1 trillion in U.S. stock market capitalization.
On June 5, Meta launched a multi-billion-dollar equity offering, intensifying the liquidity drainage effect on the market.
The Board of Governors of the Federal Reserve System announced that the operating days of the large-value payment system Fedwire Funds Service and the National Settlement Service (NSS) will be extended to Sundays and weekday holidays, changing to operations from Sunday through Friday, with unchanged daily hours; implementation as early as 2028. Whether to extend to seven days a week will be subject to a separate request for comment based on demand.