Daily take-up at the Desk's two standing facilities: the Standing Repo Facility (SRF) caps funding rates from above, the overnight reverse repo (ON RRP) floors them from below — and the RRP doubles as the parking lot for money funds' excess cash, the buffer this cycle's QT drained first.
This graph shows the amount of repo and reverse repo operations at the New York Fed. "The New York Fed conducts repo and reverse repo operations each day as a means to help keep the federal funds rate in the target range set by the Federal Open Market Committee (FOMC). Operation results include all repo and reverse repo operations conducted, including small value exercises."(NY Fed, 2025)
Primary dealers and eligible banks & depository institutions participate in the repo operations. The collaterals are U.S. Treasuries, Agency Debt Securities, and Agency MBS. From the data, we can see that repo facilities are heavily used only in distressed periods.
Primary dealers, money market funds, GSEs, and some banks without a master account at the Fed (cannot earn interest on reserves) participate in the Reverse Repo operations. A high level of RRP typically means a high level of cash holdings in the money market funds, which can be used to purchase newly issued treasury bills.
Why it matters: Together these two facilities form the guardrails of the rate corridor, and the ON RRP balance doubles as the key state variable for where QT's incidence falls: while cash remains in the RRP and bills yield more than the RRP rate, money funds surrender facility balances to absorb the new supply, so the drain is met out of idle cash and bank reserves are spared; once the RRP is near empty, the same drain lands directly on reserves and funding rates become far more sensitive. The 2023 post-debt-ceiling TGA rebuild — financed with a deluge of bills — was the textbook case, absorbed almost entirely out of the RRP. On the other side, how often and how heavily the SRF gets tapped (especially over quarter- and year-ends) is a direct read on dealer balance-sheet constraints and reserve scarcity.