Bill Ackman Doubles Down on Call for Aggressive Fed Rate Hikes


Record U.S. reverse repos highlight problem of investing excess cash

Demand for the Federal Reserve’s reverse repurchase (RRP) facility has surged in the last few weeks, as the U.S. Treasury Department’s reduced supply of short-term bills left investors few options to park excess cash. Reverse repos are conducted by the New York Fed’s Open Market Trading Desk. In a reverse repo, market participants lend cash to the Fed, usually overnight, at an interest rate of 80 basis points, in exchange for Treasuries or other government securities, with a promise to buy them back.

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