Economy

Heresy Financial: The Fed’s Hidden Move Just Ended the Reverse Repo Facility

The Federal Reserve is best known for its decisions on short-term interest rates, known as the federal funds rate. However, the central bank has several tools at its disposal. These tools allow them to tweak inflation and the money supply.

  • Special: 32,481% Growth: The SmartPhone Startup Outpacing Apple and Samsung
  • The Fed’s goal is a mandate between keeping both inflation and unemployment low. Typically, these goals are at odds, and the Fed must perform a balancing act. One of the ways they can do that is with repo facilities.

    The reverse repo facility keeps a floor under short-term interest rates. The Federal Reserve buys Treasuries from banks with these facilities. Banks can then buy new Treasuries, providing more government funding.

    In short, these facilities are a way to move newly created cash into the financial system. But it does so at a cost of reduced assets overall.

    • Bill O'Reilly Interviews Wall Street Expert to Help YOU Achieve the American Dream

      "We're going to bring back the American Dream... bigger, better, bolder, richer, safer, and stronger than ever before." - President Donald Trump

      During Trump's first term, 8 million Americans became millionaires despite constant resistance from Democrats and even some Republicans in his cabinet.

      Now, with Republicans controlling both houses and the Fed cutting rates, everything is aligned for even greater growth.

      Bill O'Reilly interviews investment expert Alexander Green who reveals details on 6 stocks with the potential to soar under Trump's pro-business policies.

      Get the Details Right Here

    Over the past few months, the Fed has been winding down its reverse repo facility. This means the bank has been buying up financial assets to reduce its repo balance.

    The potential downside is that the government is now essentially short on cash. And that the U.S. government could face a crunch in just a few days, and even hit its debt ceiling.

  • Special: The Crypto that Could Replace Visa?
  • This behind-the-scenes maneuver ends some of the Fed’s extraordinary measures from the pandemic era. But it could mean more market volatility with less liquidity in the system to start 2025.

     

    To see a full explanation of the reverse repo facility and what this move means, click here.

     

  • Special: Missed investing in Uber? Don’t Miss Mode