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1 posts on "money market mutual funds"
May 18, 2023

Banks’ Balance-Sheet Costs and ON RRP Investment

Gara Afonso, Marco Cipriani, Catherine Huang, and Gabriele La Spada

Daily investment at the Federal Reserve’s  Overnight Reverse Repo (ON RRP) facility increased from a few billion dollars in March 2021 to more than $2.3 trillion in June 2022 and has stayed above $2 trillion since then. In this post, which is based on a recent staff report, we discuss two channels—a deposit channel and a wholesale short-term debt channel—through which banks’ balance-sheet costs have increased investment by money market mutual funds (MMFs) in the ON RRP facility.

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Posted at 8:16 am in Banks, Financial Institutions, Financial Markets | Permalink | Comments (1)

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