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Fed's Quantitative Tightening Impact
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Fed's quantitative tightening drains over $1 trillion, leaving about $1 trillion parked in the reverse repurchase facility. Despite declining usage, it hasn't caused disruptions in short-term markets. The facility's inflows have fallen below $1 trillion for the first time since August 2021, attributed to firms finding better returns in private securities and a surge of Treasury bills drawing attention away from the central bank offering. The decline in inflows is expected to reach $700 billion by the end of 2024.
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How might the Fed's quantitative tightening impact the short-term interest rates?
How might the surge of Treasury bills affect the central bank's ability to control short-term interest rates?
What are the potential implications of the decline in inflows at the reverse repurchase facility on the central bank's policy decisions?
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