# How Central Banks Are Using the Reverse Repo Facility

Page: https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/how-central-banks-are-using-the-reverse-repo-facility
Text version: https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/how-central-banks-are-using-the-reverse-repo-facility.md
Podcast: [Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates](https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013)
Published: 2026-06-30T19:41:23+00:00
Episode link: https://audio.fexingo.com/business/monetary-policy-explained/episode-0083.mp3
Audio file: https://audio.fexingo.com/business/monetary-policy-explained/episode-0083.mp3
Processing state: not_requested
JSON: https://stenobird.com/v1/public/podcasts/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/episodes/how-central-banks-are-using-the-reverse-repo-facility
Duration seconds: 533

## Resource

Episode 83 of Monetary Policy Explained dives into the Federal Reserve's overnight reverse repurchase agreement facility (ON RRP). Lucas and Luna unpack how this tool works—like a parking lot for money market funds—and why its rapid decline from $2.5 trillion in 2024 to under $100 billion by mid-2026 signals a fundamental shift in banking system liquidity. They explore the mechanics: the Fed sells a Treasury to a counterparty with an agreement to buy it back the next day at a small spread. The real-world stakes? When the RRP drains, reserves build up in the banking system, which can put downward pressure on short-term rates like SOFR. The hosts also discuss why the Fed may keep the RRP floor in place even as usage dwindles, acting as a safety valve for future stress. A concise, data-driven look at a technical tool with outsized market impact. #ReverseRepo #ONRRP #FederalReserve #MonetaryPolicy #MoneyMarketFunds #BankReserves #SOFR #Liquidity #CentralBanking #Economics #FexingoBusiness #BusinessPodcast #FedBalanceSheet #Treasuries #ShortTermRates #PolicyTools #LunaAndLucas #MonetaryPolicyExplained Keep every episode free: buymeacoffee.com/fexingo

## Actions

- request_transcript: `POST https://stenobird.com/v1/public/podcasts/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/episodes/how-central-banks-are-using-the-reverse-repo-facility/transcription-requests` — Idempotently request low-priority transcript generation for this episode.
- read_markdown: `GET https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/how-central-banks-are-using-the-reverse-repo-facility.md` — Read the agent-friendly Markdown representation of this episode resource.

A page view does not enqueue transcription. Agents should invoke `request_transcript` explicitly when they need this episode processed.

## Transcript

Full transcripts are not published on public pages unless there is a clear rights basis.