"Record Surge in US Overnight Funding Rates as Fed's Reverse Repo Usage Soars at Year-End"

The Federal Reserve Bank of New York reported a significant surge in inflows to its overnight reverse repo facility, reaching $1.018 trillion on the last trading day of the year. This marks the first time inflows have exceeded $1 trillion since November 13, reflecting the facility's role in setting a floor for short-term interest rates. The increase comes as the Fed scales back liquidity and as money market securities become more appealing to investors. Despite the year-end spike, analysts predict a substantial decrease in inflows in the following weeks. No inflows were reported for the Fed's Standing Repo Facility, indicating no major liquidity issues in the money markets.