{"id":60181,"date":"2023-09-12T19:30:29","date_gmt":"2023-09-12T23:30:29","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/as-t-bill-yields-climb-feds-reverse-repo-facility-shrinks-to-lowest-level-in-1%c2%bd-years\/"},"modified":"2023-09-12T19:30:32","modified_gmt":"2023-09-12T23:30:32","slug":"as-t-bill-yields-climb-feds-reverse-repo-facility-shrinks-to-lowest-level-in-1%c2%bd-years","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=60181","title":{"rendered":"As T-bill yields climb, Fed\u2019s reverse repo facility shrinks to lowest level in 1\u00bd years"},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0002496006\" role=\"document\">\n<p>Yields on Treasury bills pushed above 5.4% on Tuesday to top what investors can earn by parking cash at the Federal Reserve\u2019s reverse repo facility, according to Tradeweb data.<\/p>\n<p>This chart shows the sharp increase in one-month<br \/>\n        BX:TMUBMUSD01M<br \/>\n       to one-year Treasury Treasury yields<br \/>\n        BX:TMUBMUSD01Y<br \/>\n       since January 2022, in the months before the Fed began to dramatically raise its policy rate to stomp out high inflation. <\/p>\n<div class=\"paywall\">\n<div data-layout=\"inline\n                \" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetMediaIllustration\n            inline\n  article__inset\n          article__inset--type-InsetMediaIllustration\n            article__inset--inline\n  \"><\/p>\n<p>          <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-inline\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>T-bills are U.S. government-issued securities that mature in a year or less. The Fed\u2019s policy rate in July was increased to a 5.25% to 5.5% range, the highest in 22 years, helping push bond yields higher. <\/p>\n<p>Of note, bill yields jumped the most on government securities that mature in one month, two months and three months<br \/>\n        BX:TMUBMUSD03M<br \/>\n       over the past year, up more than 100 basis points, according to Tradeweb. <\/p>\n<p>Yields on the four-month, six-month<br \/>\n        BX:TMUBMUSD06M<br \/>\n       and one-year bills also gained roughly 69-81 basis points in the same stretch.<\/p>\n<p>An elevated fed policy rate helped lift all six series of Treasury bills above 5.4%, according to Tradeweb data, whereas the Fed\u2019s overnight reverse repo rate has been steady at 5.3% since July 26, when the central bank last hiked rates.<\/p>\n<p>Loftier Treasury yields have enticed money-market funds and other investors into short-term government bills, a place many park cash over the short term to earn a return.<\/p>\n<p><strong>Read<\/strong>: Higher Treasury yields are giving stocks a run for their money<\/p>\n<p>At the same time, overnight demand for the Fed\u2019s reverse repo facility has been dropping, signaling less need for a key cog in the plumbing of financial markets over the past two years.<\/p>\n<p>Demand for the facility peaked at slightly more than $2.5 trillion in December, but had dropped below $1.49 trillion on Tuesday, the lowest level since March 2022, according to New York Fed data.<\/p>\n<p>Also pushing up Treasury-bill yields has been a deluge of new supply to refill coffers run low by the U.S. debt-ceiling fight. In August, the Treasury raised its expected borrowing need to $1 trillion for the third quarter.<\/p>\n<p><strong>Read next:<\/strong> U.S. budget deficit will double this year to $2 trillion, excluding student loans, CBO says<\/p>\n<p><strong>See<\/strong>: Why the deficit is a \u2018big time\u2019 worry<\/p>\n<p>Stocks<br \/>\n        DJIA<\/p>\n<p>        SPX<br \/>\n       closed lower on Tuesday, with Apple\u2019s<br \/>\n        AAPL,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/202934861\/composite\" class=\"negative\">-1.71%<\/bg-quote><br \/>\n       release of its latest iPhones and other consumer products failing to lift technology stocks. The benchmark 10-year Treasury yield<br \/>\n        BX:TMUBMUSD10Y<br \/>\n       was near 4.263% Tuesday.<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/story\/as-t-bill-yields-climb-feds-reverse-repo-facility-shrinks-to-lowest-level-in-1-years-3ad4b776?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Yields on Treasury bills pushed above 5.4% on Tuesday to top what investors can earn by parking cash at the Federal Reserve\u2019s reverse repo facility, according to Tradeweb data. This chart shows the sharp increase in one-month BX:TMUBMUSD01M to one-year Treasury Treasury yields BX:TMUBMUSD01Y since January 2022, in the months before the Fed began to [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":60182,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-60181","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>As T-bill yields climb, Fed\u2019s reverse repo facility shrinks to lowest level in 1\u00bd years | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Yields on Treasury bills pushed above 5.4% on Tuesday to top what investors can earn by parking cash at the Federal Reserve\u2019s 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