U.S. Fed reverse repo volume hits record $1T

Post by protoax » Fri, Jul 30, 2021, 11:22 PM UTC

trenning wrote: post #9

JumpCrisscross wrote: post #4

Earlier quoted context omitted.

> Can anyone better at understanding economics explain what this means to me? Reverse repos involve banks buying securities from the Fed in the evening, with the Fed agreeing to buy them back in the morning for another price. Until recently, the first price and second price were the same. Now, the second price is 0.05% higher (annualised). Banks are parking a trillion dollars with the Fed overnight. That’s a trillion…

Does that mean the fed is earning ~$50billion in interest a day? That seems good for our national budget unless I'm misinterpreting it.

Post by skzv » Sat, Jul 31, 2021, 7:12 AM UTC

tru3_power wrote: post #10

JumpCrisscross wrote: post #4

Earlier quoted context omitted.

> Can anyone better at understanding economics explain what this means to me? Reverse repos involve banks buying securities from the Fed in the evening, with the Fed agreeing to buy them back in the morning for another price. Until recently, the first price and second price were the same. Now, the second price is 0.05% higher (annualised). Banks are parking a trillion dollars with the Fed overnight. That’s a trillion…

Why exactly is the 2nd price higher? What purpose does that serve/what does it signal?

Post by altspace » Sat, Jul 31, 2021, 3:32 PM UTC