Overview
- Officials flagged elevated and volatile overnight repo rates, wider gaps versus administered rates, and increased use of the standing repo facility.
- Reserves were described as near the lower edge of the Fed’s “ample” range, heightening the risk that small demand shifts could jolt funding costs.
- Participants discussed buying short‑term Treasuries to maintain reserves, with surveys pointing to about $220 billion of purchases in the first year.
- Policymakers explored removing the standing repo facility’s overall usage cap and refining communications so it is seen as a routine tool.
- The CME FedWatch tool put the odds of no change on Jan. 27–28 near 85%, with the target range remaining at 3.50%–3.75% for now.