The Great Reallocation: How $2.5 Trillion Left the Fed Without Breaking Markets
Between mid-2023 and early 2025, a staggering ~$2.5 trillion quietly vanished from a key Federal Reserve facility. This cash hoard, held in the Fed’s Overnight Reverse Repurchase Agreement (ON RRP) facility, had ballooned after the pandemic, serving as a parking lot for money market funds (MMFs) awash in liquidity. Its rapid decline sparked fears of…