Fed's Balance Sheet: RRPs Plummet, Reserves Soar, Currency in Circulation Drops, TGA Replenished
The Fed's liabilities have seen significant movements, with Overnight Reverse Repurchase agreements (ON RRPs) plunging by 45% since December 2022. Money market funds have been withdrawing their cash from RRPs to invest in Treasury bills. Additionally, foreign official RRPs have dropped by 25% since January 2023. Reserves have risen since the March bank panic, but overall, the combined balance of Reserves and RRPs has decreased by 16% since December 2021. Currency in circulation has dipped slightly, while the Treasury General Account has reached $537 billion.