Chart of the Month: January 2024



Usage of an important Federal Reserve facility, the Reverse Repo Facility (RRP), has declined sharply. Increasing Treasury bill supply, competing demand for cash and rising average maturities in money market funds have contributed to the decline. This combined with tight year-end liquidity conditions caused a spike in the SOFR rates around the year-end turn, but we believe this is a temporary phenomenon and market participants should not draw any ominous conclusions.