Money continues to flood onto the Federal Reserve’s balance sheet and one bank says government stimulus money is a key driver.
Over recent weeks, more and more money, largely from money-market funds but also banks and government sponsored companies, has surged into the Fed’s overnight reverse repo facility, often referred to as RRP. This facility takes in cash at a zero percent return, in transactions collateralized with Fed-owned Treasury securities, and exists largely to help the central bank manage where the federal-funds…
