{"id":277537,"date":"2021-06-18T00:02:00","date_gmt":"2021-06-17T21:02:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/fed-sees-record-756-billion-demand-for-reverse-repo-program-and-may-hit-1-trillion\/"},"modified":"2021-06-18T00:02:00","modified_gmt":"2021-06-17T21:02:00","slug":"fed-sees-record-756-billion-demand-for-reverse-repo-program-and-may-hit-1-trillion","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/fed-sees-record-756-billion-demand-for-reverse-repo-program-and-may-hit-1-trillion\/","title":{"rendered":"#\n  Fed sees record $756 billion demand for reverse repo program and may hit $1 trillion"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_89 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6af08147b1f02\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6af08147b1f02\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/fed-sees-record-756-billion-demand-for-reverse-repo-program-and-may-hit-1-trillion\/#Mix_of_pressures_expected_to_push_overnight_demand_to_1_trillion\" >Mix of pressures expected to push overnight demand to $1 trillion<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/fed-sees-record-756-billion-demand-for-reverse-repo-program-and-may-hit-1-trillion\/#Sinking_T-bill_supply\" >Sinking T-bill supply<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/fed-sees-record-756-billion-demand-for-reverse-repo-program-and-may-hit-1-trillion\/#Joy_Wiltermuth\" >Joy Wiltermuth<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#<br \/>\n  Fed sees record $756 billion demand for reverse repo program and may hit $1 trillion<br \/>\n<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"Mix_of_pressures_expected_to_push_overnight_demand_to_1_trillion\"><\/span>\n  Mix of pressures expected to push overnight demand to $1 trillion<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\">\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000309377\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Banks and money-market funds using the Federal Reserve\u2019s overnight reverse repo program parked <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/fred.stlouisfed.org\/series\/RRPONTSYD\" class=\"icon none\">a record $755.80 billion<\/a> in cash with the central bank on Thursday, a day after policy makers tweaked the facility\u2019s payout.<\/p>\n<p> High demand for the facility since April underscores how awash financial markets have become with cash during the pandemic, as trillions worth of fiscal and monetary stimulus slosh through the economy.<\/p>\n<div class=\"paywall\">\n       With interest rates low globally, banks and money-market investors have been eager to avoid negative yields and have been parking cash in the Fed facility, which as of Thursday <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.wsj.com\/articles\/federal-reserve-adjusts-settings-on-rate-control-tool-kit-11623868010\" class=\"icon none\">pays 0.05% instead of 0%<\/a>. <\/p>\n<p>It \u201cisn\u2019t a lot, but it\u2019s better than zero,\u201d said Jim Vogel, interest rate strategist at FHN Financial, about the Fed\u2019s bump up in its reverse repo rate.<\/p>\n<p>\u201cWhen the Fed opened up this new avenue, $250 billion of fresh demand came in overnight,\u201d Vogel said. The Fed\u2019s decision Wednesday to boost the rate it pays on excess reserves and on the overnight reverse repo facility comes as part of a broader strategy to keep a grip on short-term rates, while helping to stoke the U.S. economic recovery.<\/p>\n<p>Fed Chair Jerome Powell on Wednesday also reiterated that it still was too early for the central bank to raise short-term rates above its current 0%-0.25% target range or trim its near $120 billion-a-month bond buying program. <\/p>\n<p>But in a surprise for markets, Powell said the Fed now has penciled in two potential interest rate increases in 2023, while stressing that central bank officials were attuned to the risk of inflation rising faster than expected.  <\/p>\n<p>The Fed\u2019s update on its inflation outlook and forecast for raising interest rates, sparked an \u201coops\u201d reaction across markets, Vogel said, and volatility jumped in bonds<br \/>\n        TMUBMUSD10Y,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.000%\" channel=\"\" class=\"\">1.509%<\/bg-quote><span>,<\/span><br \/>\n        currencies<br \/>\n        DXY,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598269\/delayed\" class=\"positive\">+0.86%<\/bg-quote><span>,<\/span><br \/>\n       commodities<br \/>\n        CL00,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209723049\/delayed\" class=\"negative\">-1.51%<\/bg-quote><br \/>\n       and even the Dow Jones Industrial Average<br \/>\n        DJIA,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598065\/realtime\" class=\"negative\">-0.62%<\/bg-quote><span>.<\/span>\n       <\/p>\n<p>Even so, the scramble for safe places to park cash isn\u2019t only about Fed policy, which is why Vogel and other strategists think demand for the facility could easily top $1 trillion this quarter. <\/p>\n<p>Increasing use of the central bank\u2019s reverse repo facility also has coincided with a $478.1 billion \u201cfreefall\u201d in net Treasury bill supply since the start of the year, with the pace of maturing bills exceeding new bill issuance, according to Jefferies economists Thomas Simons and Aneta Markowska.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        renoImageFormat-\n        img-inline\n        article__inset__image\n      \" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<div style=\"padding-bottom:57.03125%;\" data-mobile-ratio=\"57.03125%\" data-layout-ratio=\"57.03125%\" data-subtype=\"photo\" class=\"image-container  responsive-media article__inset__image__image\">\n        <img decoding=\"async\" srcset=\"https:\/\/images.mktw.net\/im-355814?width=140&amp;size=1.7534246575342465 140w,\nhttps:\/\/images.mktw.net\/im-355814?width=540&amp;size=1.7534246575342465 540w,\nhttps:\/\/images.mktw.net\/im-355814?width=620&amp;size=1.7534246575342465 620w,\nhttps:\/\/images.mktw.net\/im-355814?width=700&amp;size=1.7534246575342465 700w,\nhttps:\/\/images.mktw.net\/im-355814?width=860&amp;size=1.7534246575342465 860w,\nhttps:\/\/images.mktw.net\/im-355814?width=1260&amp;size=1.7534246575342465 1260w\" sizes=\"(max-width: 140px) 100px,\n(max-width: 540px) 500px,\n(max-width: 620px) 580px,\n(max-width: 700px) 660px,\n(max-width: 860px) 820px,\n1260px\" src=\"https:\/\/images.mktw.net\/im-355814?width=620&amp;size=1.7534246575342465\" data-enlarge=\"https:\/\/images.mktw.net\/im-355814?width=1260&amp;size=1.7534246575342465\" alt=\"\" title=\"Sinking T-bill supply\"><\/div><figcaption class=\"wsj-article-caption article__inset__image__caption\" itemprop=\"caption\">\n<h4 class=\"wsj-article-caption-content\"><span class=\"ez-toc-section\" id=\"Sinking_T-bill_supply\"><\/span>Sinking T-bill supply<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>      <span class=\"wsj-article-credit article__inset__image__caption__credit\" itemprop=\"creator\"><br \/>\n            Jefferies<br \/>\n          <\/span><br \/>\n  <\/figcaption><\/figure>\n<\/div>\n<p>\u201cWorse still, the potential for supply to increase materially over the next year or so is quite low,\u201d the team wrote in a recent client note.<\/p>\n<p>Recent guidance from the U.S. Treasury Department shows it intends to run cash balances down to $450 billion by July 31 from $776.7 billion as of late May, to \u201csatisfy the requirements of the law that suspended the debt ceiling back in 2019,\u201d they wrote. \u201cSo Treasury\u2019s borrowing needs are going to be very light in the interim.\u201d<\/p>\n<p>\u201cThe question is not how high it goes,\u201d Vogel said of reverse repo demand. \u201cBut where does it land after the debt ceiling agreement is reached.\u201d<\/p>\n<p><strong>Read<\/strong>: U.S. Treasury officials urge Congress to raise debt-limit<\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>      <span>By<\/span><\/p>\n<div class=\"author  hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\" Joy Wiltermuth\",\"subhead\":\"The Wall Street Journal\",\"list\":[]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Joy_Wiltermuth\"><\/span> Joy Wiltermuth<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"http:\/\/www.marketwatch.com\/news\/story.asp?guid=%7B20C05575-04D4-B545-74B8-81A2FDB46548%7D&#038;siteid=rss&#038;rss=1\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Fed sees record $756 billion demand for reverse repo program and may hit $1 trillion &#8221; Mix of pressures expected to push overnight demand to $1 trillion Banks and money-market funds using the Federal Reserve\u2019s overnight reverse repo program parked a record $755.80 billion in cash with the central bank on Thursday, a day&#8230;<\/p>\n","protected":false},"author":1,"featured_media":277538,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-277537","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/277537","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=277537"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/277537\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/277538"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=277537"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=277537"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=277537"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}