84.1 Fed Reverse Repo Record – Why the Big Deal?!

———Ep 84.1 Summary———
After the Federal Reserve raised the return on one of its bank programs, a record $756 billion flowed into the central bank’s reverse repo facility. Jerome Powel said, “We’re not concerned.” He should be. Like the Fed should’ve been in 2017 when something similar happened. A warning. Again.

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———Ep 84.1 Topics———

00:00 The Federal Reserve’s Reverse Repo Program
01:16 On June 16, 2021 the Federal Reserve raised their rates on their IOER and RRP rates
03:19 The mainstream focuses on too much cash – true. But what about not enough collateral?!
06:47 Why is the zero lower bound important? Why is the higher RRP floor VERY important now?
11:23 The Federal Reserve cares VERY MUCH about the Federal Funds Rate; NOBODY ELSE DOES!
13:25 The RRP “floor” was violated by market rates – immediately, again; like in 2017.
17:54 Use of the RRP coincided with monetary measures that signaled reflation had paused.
20:22 Concluding and summary thoughts about the Federal Reserve’s Reverse Repo Program.

———Ep 84.1 References———

The FOMC Accidentally Exposes Itself (Reverse Repo-style): https://bit.ly/3zCfXTe
79a Warning: the Fed’s Reverse Repo Program Surges!: https://youtu.be/9VqAB07ny4w
Upcoming Bill Cliff Refunding Recalls Rerun Reverse Repo: https://bit.ly/3j59E4P
Overnight RRP Operations as a Monetary Policy Tool: https://bit.ly/2TN1XFr
Alhambra Investments Blog: https://bit.ly/2VIC2wW
Real Clear Markets Essays: https://bit.ly/38tL5a7