Overnight Reverse Repo Activity Continues To Fall

We view the Overnight Reverse Repo (ONRR) market as a proxy for excess liquidity in the system.

• The chart continues to average down as the Fed slowly removes liquidity from the system through QT.

• The ONRR balance is approximately $433 billion and hit a three year low on April 15th at $327 billion. It will be interesting to see if the Fed halts QT once ONRR market activity dwindles to close to zero.

Overnight Reverse Repo - source: Federal Reserve Bank of New York HERE.

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