Fed’s Reverse-Repo Position

It is believed that the Fed have been speaking with Primary Dealers about restarting Reverse-Repo operations soon. They stopped operations in Dec. 2008 after the last rate cut. It’s worth noting that pre-crisis (before Sept. 15, 2008), the typical Fed repo operation was between $2b and $10b. Dealers believe it may be the potential size of the upcoming operations that is the reason for the meetings and the Fed’s statement released today. To date the Fed’s balance sheet has grown over $1 trillion since 2008!

Statement Regarding Reverse Repurchase Agreements

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Dean Popplewell

Vice-President of Market Analysis at MarketPulse

Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.

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