Summary of Reverse Repo Starting to Move Lower

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The Reverse Repo Market is a tool used by the Federal Reserve that has come more into the public eye in recent months. The market is currently dealing with a large amount of cash, which is draining the facility. If this trend continues, it could be a sign of a larger market trend.

• 00:00:00 The Reverse Repo Market is a tool used by the Federal Reserve that has come more into the public eye in recent months. The market is currently dealing with a large amount of cash, which is draining the facility. If this trend continues, it could be a sign of a larger market trend.
• 00:05:00 The 1-year Treasury note is paying 4.23% interest at the moment, which is higher than the 3.8% rate offered by the reverse repo facility. This puts money into banks' pockets, which is why they're moving lower. If the Federal Reserve decides to raise interest rates, this will cause the liquidity in the reverse repo facility to flow out and drive rates down.