Some Fed policymakers open to lowering the overnight repo rate

Some Federal Reserve policymakers believe it may soon be time to lower the rate on funds that banks and money market funds park at the Fed, minutes from the Fed's most recent meeting indicated, so that it once again matches the bottom of the range of the policy rate. The so-called overnight reverse repurchase agreement rate, one of two technical lending rates the Fed uses to ensure the federal funds rate stays within its monetary policy target range, is currently set at 4.55%, while the policy rate range is 4.5% to 4.75%. The overnight reverse repurchase agreement rate has ridden 5 basis points above the bottom of the Fed's policy rate range since 2021, when the Fed adjusted it to firm up the "floor" of the policy rate range.