the funding could also come from Fed’s facilities, like the SRF or OMO

the funding could also come from Fed’s facilities, like the SRF or OMO

however, current SRF rate is 4.5%, which is above the yield on T-bills, and Fed is still officially in QT, so no large-scale, longer-term liquidity injections via open market operations

Illya Gerasymchuk 2025-08-22 13:58

moreover, currently the US Treasury is issuing debt and cash at ON RRP is running low. MMF, dealers and banks purchase those T-bills. if they do not have cash in ON RRP, it will be financed by outflows from bank reserve accounts into TGA