Seems like a new way to do the old Quantitative Easing…

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by Dismal-Jellyfish

The Fed receives cash and provides collateral: As of 4/19, $2,666,343 million in Reverse Repurchase agreements (transactions in which securities are sold to a set of counterparties under an agreement to buy them back from the same party on a specified date at the same price plus interest).

3/15/2023: $2,423,126 million

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Source: fred.stlouisfed.org/series/WLRRAL

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Zooming in, since 3/15/2023, Reverse Repurchase Agreements +$243,217 million.

  • Reverse repurchase agreements are transactions in which securities are sold to a set of counterparties under an agreement to buy them back from the same party on a specified date at the same price plus interest.
  • Reverse repurchase agreements may be conducted with foreign official and international accounts as a service to the holders of these accounts.
  • All other reverse repurchase agreements, including transactions with primary dealers and a set of eligible money market funds, are open market operations intended to manage the supply of reserve balances; reverse repurchase agreements absorb reserve balances from the banking system for the length of the agreement.
  • As with repurchase agreements, the naming convention used here reflects the transaction from the counterparties’ perspective:
    • The Federal Reserve receives cash in a reverse repurchase agreement and provides collateral to the counterparties.
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