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 for the ON RRP Facility is $647 million, which has been relatively stable over the past week but represents a significant decline from the peak of $80 million observed earlier in April. The trend shows a sharp decrease from a high of $80 million on multiple occasions, indicating a depletion of liquidity and a concerning tightening of financial conditions. This trend signals an increased recession risk as the facility is now fully depleted, suggesting that there is no buffer to absorb shocks in the financial system. The near-zero level indicates a lack of available liquidity, which could exacerbate economic downturns and lead to tighter credit conditions.
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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Interest Expense
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