Fed Overnight Reverse Repo Usage at $34.02 Billion

Summary

On Monday, January 12, the usage of the Federal Reserve’s Overnight Reverse Repo (RRP) facility was $3.402 billion, a slight increase from the previous day’s $3.28 billion.Wallstreetcn This follows a period at the end of 2025 where financial institutions borrowed a record $74.6 billion from the Fed’s Standing Repo Facility (SRF) to manage year-end liquidity needs.Sina Finance+ 2

Impact Analysis

So the RRP is effectively empty. This is the big signal that the primary liquidity buffer absorbing Quantitative Tightening is gone. For the past couple of years, QT was just draining this excess cash pile; now it starts pulling reserves directly from the banking system.

Remember the year-end scramble where firms borrowed a record amount from the Fed?Sina Finance+ 2 This is the other side of that coin—the system is tight, not flush. This basically puts a clock on QT. The Fed has to be getting very close to slowing or stopping its balance sheet runoff to avoid a funding market accident like in 2019. Bottom line: the risk of volatility in overnight rates just went up significantly. This is a clear warning shot that the Fed’s ability to continue QT is nearing its limit.