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Repo Markets and the Fed’s Balance Sheet: Implications for Monetary Policy Implementation

Year: 2026

Type: article

Abstract: As the Federal Reserve (Fed) navigates periods of balance sheet expansion and reduction, it has become increasingly important to understand how changes in the size and composition of Fed assets affect short-term funding markets. The overnight Treasury repo market is central to this relationship since it is a transmission channel through which balance sheet policy can affect money market conditions and, ultimately, the Fed's policy rate, the effective federal funds rate (EFFR).

Source: FEDS Notes

DOI: 10.17016/2380-7172.4069

Authors: Sriya Anbil, Alyssa G. Anderson, Lucy Cordes, Romina Ruprecht

Institutions: Federal Reserve, Federal Reserve Board of Governors

Language: English

Topic: Monetary Policy and Economic Impact

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

OpenAlex ID: W7204537907

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Related to: 10