Federal Reserve meeting minutes show tightening in short-term funding markets, with reserves approaching ample levels

ChainCatcher news, according to Golden Ten Data, the minutes of the Federal Reserve's October meeting show that conditions in the U.S. short-term funding market tightened significantly during the interim period, but remained orderly. Near the end of the interim period, the spread between the effective federal funds rate and the interest rate on reserve balances narrowed to its tightest level since the Fed began balance sheet reduction in 2022. The secured overnight financing rate broke through the minimum bid rate of the standing repo facility several times, resulting in multiple uses of this tool. The average usage of the overnight reverse repo facility dropped to its lowest level since 2021. These changes indicate that reserve balances are gradually approaching an ample level.