The New York Fed’s Treasury Market Practices Group (TMPG) released the minutes of its previous meeting in February. Among the discussion items was year-end operations of the standing repo facility.
“While members generally interpreted the announcement of morning SRF operations near year end as having an overall positive effect on year-end conditions, the limited SRF’s usage over year-end was attributed to subdued repo rates relative to the SRF rate and primary dealers securing balance sheet allocations ahead of year-end.
“Members noted that any modifications to the SRF around statement dates, such as an earlier operation time, would be most effective if announced well in advance, allowing SRF counterparties ample time for planning and potential balance sheet adjustments.
“Members generally anticipate that SRF morning operations would likely be in more demand around future quarter-ends and year-ends, as the ON RRP facility usage declines further, even in the absence of US Treasury repo market volatility.”
Other agenda items included an update from the Non-Centrally Cleared Bilateral Repo (NCCBR) Working Group, and central clearing in the US Treasury market.