The use of overnight reverse repo agreements by the Fed is expected to hit an all-time high as short-end interest rates remain near zero.
The overnight general guaranteed repo rate traded at 0 per cent for the first time, with a bid price of 0.01 per cent at 0 per cent, according to ICAP. On Monday, the use of reverse repo tools rose to a record high of $486.1 billion, surpassing the high of $485.3 billion on May 27 and up from $483.3 billion on June 4.
Analysts at the Oxford Institute of Economics said in a report that the general guaranteed repo rate is expected to remain under pressure during the settlement period and that demand for overnight reverse repo operations is likely to set a new record as next week's FOMC meeting approaches.