Fed Overnight Reverse Repo Facility (RRPONTSYD)
Daily Federal Reserve Overnight Reverse Repo Facility usage (RRPONTSYD) from 2015 onwards. The 'parking lot' for excess USD liquidity from money-market funds. The RRP balance went from effectively zero in early 2021 to over $2.5 trillion at the December 2022 peak (an unprecedented liquidity overhang) and has drained back toward zero through 2025. The drain has effectively offset much of the Fed's QT impact on bank reserves. AUD-trader framing on USD liquidity transmission.
Chart
Daily ON RRP take-up in USD billions. The 2021-2024 surge and drain are visible as one large hump.
What is the reverse repo facility?
A reverse repo is the mirror of a standard repo. In a standard repo, an investor lends cash and receives securities as collateral; the borrower repurchases the collateral the next day at a slightly higher price (the repo rate). In a reverse repo from the Fed's perspective, the Fed lends Treasuries overnight in exchange for cash and pays the agreed rate on the cash position.
The Fed operates the ON RRP facility daily with a fixed offered rate. Money-market funds, GSEs (Fannie Mae, Freddie Mac, FHLBs), and primary dealers are eligible counterparties. The facility is open 1:00-1:15 PM ET. Each counterparty has a daily limit; in aggregate the facility can absorb effectively unlimited cash. The daily total accepted is RRPONTSYD.
Why the RRP drain matters
The Fed's balance sheet has two main liability buckets that absorb the asset side: bank reserves, and the ON RRP. Bank reserves drive monetary policy transmission (banks lend on reserves; reserves support credit creation). The RRP is sterile capital - parked overnight, not deployed.
When QT reduces the asset side of the Fed's balance sheet, the liability side falls by an equal amount. If the fall comes out of RRP (sterile capital exits), monetary conditions barely change. If it comes out of bank reserves (credit-creating capital exits), monetary conditions tighten meaningfully.
From mid-2022 through 2024, the Fed's $2.3T QT was almost entirely offset by a $2.4T fall in RRP take-up. Bank reserves stayed roughly flat at $3.0-3.3T through the period. Effectively no monetary tightening from balance-sheet contraction - the entire effect was the Fed Funds rate channel.
Methodology
- Source. FRED series RRPONTSYD (daily ON RRP take-up, USD billions).
- Endpoint. Public fredgraph.csv.
- Recession shading. NBER-dated US recessions.
- Static-first. Snapshot preserved if FRED unreachable.
Related tools
- Fed Balance Sheet (WALCL) - the asset-side total.
- Fed Funds Rate - the policy rate the RRP rate tracks.
- M2 Money Supply - the broader liquidity measure.
- 2Y Treasury Yield - the short-end rate competing with RRP.
Frequently asked questions
The Overnight Reverse Repo (ON RRP) is a Fed-operated facility that lets money-market funds, government-sponsored enterprises, and primary dealers park USD overnight at the Fed in exchange for Treasury collateral. The Fed pays a fixed rate (5 bps below the IORB rate as of 2026). It is one of the Fed's monetary policy tools: by adjusting the offered rate, the Fed sets a floor under short-term USD rates. The total daily uptake is FRED series RRPONTSYD.
Three factors. (1) Massive money-market fund AUM growth during COVID (households parked stimulus savings). (2) Treasury bill supply collapsed (the Treasury cut bill issuance as it drew down the Treasury General Account). (3) MMFs had nowhere else to put cash at competitive rates. The Fed's RRP rate (raised through 2021 from 0 bps to 5 bps to 80 bps to track Fed Funds) was suddenly the highest-yielding ultra-safe USD instrument available, and MMFs flooded the facility. Peak balance: $2.554 trillion on 30 December 2022.
Three factors reversing. (1) Treasury bill supply surged starting mid-2023 as the Treasury rebuilt its General Account post debt-ceiling resolution. (2) Bill yields rose above the RRP rate, so MMFs preferred bills. (3) Bank deposits stabilised after the March 2023 banking stress, reducing the demand for parked cash. As of 2026, RRP balances are below $100B - back near pre-2021 norms - and the drain effectively pumped $2.4T of liquidity back into bank reserves and bills.
Indirectly through the bank-reserve channel. As RRP balance falls, the funds flow back into bank reserves or T-bills, which compresses funding costs and supports risk-asset valuations. The 2023-2025 RRP drain effectively offset most of the Fed's QT impact on bank reserves, which is part of why the 2022-2024 bear market didn't extend as far as similar QT episodes might have suggested. BTC AUD's recovery from late 2022 to 2026 coincides with the RRP drain.
QT bites harder. Once the RRP cushion is exhausted, every dollar of further Fed balance-sheet contraction comes directly out of bank reserves. The 2019 repo crisis happened when bank reserves got too low; the Fed has been explicit it will end QT before that risk re-emerges. As of 2026 the Fed has ended QT precisely to avoid running bank reserves below the 'ample reserves' floor.
FRED series RRPONTSYD, sourced from the New York Fed's daily Treasury auction tools page. The series begins September 2013 (when the ON RRP facility was launched as a research tool); it became operational in 2014 and the chart starts from 2015. Daily values in USD billions.
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