ON RRP Facility Levels
Track the Federal Reserve's Overnight Reverse Repo facility. Declining ON RRP signals the financial system's liquidity buffer is thinning.
Current Value
Trigger Level: Near zero = no buffer
Historical Trend
AI Analysis
Today's value of the ON RRP Facility is $761 million, a significant decline from the recent peak of $80 million observed on multiple days in late April and early May. This marks a steep drop from $1.512 million on March 10, indicating a clear downward trend over the past three months, with the facility now fully depleted at 100%. This trend suggests an increased recession risk, as the near-zero buffer indicates a lack of liquidity in the financial system, which can lead to tighter credit conditions and reduced economic activity. The rapid depletion from previous levels highlights a potential liquidity crisis, exacerbating concerns about economic stability.
What is the ON RRP Facility?
The Overnight Reverse Repurchase Agreement (ON RRP) Facility allows eligible counterparties to deposit excess cash at the Federal Reserve overnight. Its balance reflects excess liquidity sloshing around the financial system.
Why It Matters for Recession Risk
Rapidly declining ON RRP balances indicate the financial system's liquidity cushion is evaporating. Near-zero levels mean banks and money market funds have less buffer during market stress events.
Historical Context
ON RRP balances peaked above $2.5 trillion in late 2022 and have been declining as quantitative tightening drains reserves. The pace of decline is a key indicator of when liquidity constraints may start binding.
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