The Reverse Repo Account

The Federal Reserve has about $2 trillion locked at the reserve repo facility. Money market funds effectively look at a couple of options there today, says Kevin Hassett. The one-on-one relationship for which bank reserves move down by the same amount of bonds issued to replenish the TJ does not take into account that this could be sterilized by money from the reserve repo. "It's reverse repo account has become an albatross like it's monstrous," said Hassett.