Re:U.S. Fed reverse repo volume hits record $1T
by trenning on Friday July 30, 2021 @05:37PM
(#28012675)
Does that mean the fed is earning ~$50billion in interest a day?
That seems good for our national budget unless I'm misinterpreting it.
Re:U.S. Fed reverse repo volume hits record $1T
by protoax on Friday July 30, 2021 @07:22PM
(#28013626)
Where are you getting that figure from? 0.05% is $500m.
Re:U.S. Fed reverse repo volume hits record $1T
by skzv on Saturday July 31, 2021 @03:11AM
(#28016073)
It's also annualized, so it's $500m over the entire year.
And it's interest earned by the banks, not the Fed.
Re:U.S. Fed reverse repo volume hits record $1T
by altspace on Saturday July 31, 2021 @11:29AM
(#28018985)
No, Fed is Paying ~$1.37 Million in interest a day
Re:U.S. Fed reverse repo volume hits record $1T
by tru3_power on Friday July 30, 2021 @06:05PM
(#28012994)
Why exactly is the 2nd price higher? What purpose does that serve/what does it signal?
Reverse repos involve banks buying securities from the Fed in the evening, with the Fed agreeing to buy them back in the morning for another price. Until recently, the first price and second price were the same. Now, the second price is 0.05% higher (annualised).
Banks are parking a trillion dollars with the Fed overnight. That’s a trillion dollars that won’t be lent, i.e. won’t contribute to growth or inflation.