What Is the Standing Repo Facility? The $74.6 Billion Day

On 31 December 2025, banks and dealers borrowed $74.6 billion overnight from the Federal Reserve through one facility. Until 30 September 2024, it had never lent as much as $1 billion in a day.

That facility is the Standing Repo Facility. The Fed set it up in July 2021 as a ceiling on US overnight interest rates. Here is how it works and who can use it. We also compare it with the Fed's facility that takes cash in, then look at its busiest days.

A repo is an overnight loan of cash backed by bonds. One side sells bonds and agrees to buy them back the next day at a slightly higher price. We explain the market in What Is the Repo Market?

In the Standing Repo Facility, the Fed is the lender. It buys bonds from a firm and sells them back the next day. The gap between the two prices is the interest.

The Federal Open Market Committee (FOMC), the Fed's rate-setting committee, announced the facility on 28 July 2021. It was one of two new "backstops in money markets". Since December 2025, the New York Fed, which runs it, has called it standing repo operations (SRP).

Two groups of firms can borrow:

Firms can pledge three kinds of bond: US Treasuries, agency debt and agency mortgage bonds. Agency bonds are issued or guaranteed by government-backed agencies such as Fannie Mae.

The New York Fed runs two operations each business day, from 8:15 to 8:30 am and from 1:30 to 1:45 pm Eastern time. The morning one, made daily on 26 June 2025, gets cash to firms earlier.

Each firm can ask for up to $40 billion per type of bond in each operation. Until 11 December 2025, firms bid in an auction, with the facility rate as the lowest bid accepted. The total was capped at $500 billion a day.

Since then, every loan has been made at the facility rate, with no cap on the total.

The FOMC sets the rate in the implementation note that comes with each decision. The note of 16 September 2026 set it at "4.0 percent", the top of the target range of 3.75% to 4%.

We checked every operation day since July 2021 that lists a rate, 1,260 days in all. The rate matched the top of the range on every one. We explain the range and the tools that hold it in How the Fed Sets Rates.

A firm that can borrow from the Fed at 4.00% has little reason to pay much more in the market. That caps overnight rates near the top of the range.

Source: Federal Reserve; Federal Reserve Bank of New York

The two facilities sit at opposite edges of the target range. In the Overnight Reverse Repo Facility (ON RRP), firms lend cash to the Fed. That sets a floor under overnight rates. In the Standing Repo Facility, the Fed lends cash. That sets a ceiling.

On 7 October 2026, the ON RRP held $2.3 billion. We cover it in What Is the Reverse Repo Facility?

The chart shows the cash lent each day from 29 July 2021 to 7 October 2026. For more than three years, use stayed near zero. The first day above $1 billion was 30 September 2024, at $2.6 billion.

Use took off in late 2025. That year, firms borrowed $1 billion or more on 30 days. The largest were $50.4 billion on 31 October and $74.6 billion on 31 December.

Those months came after bank reserves, the cash banks keep at the Fed, had fallen. They went from $3.40 trillion in the week to 16 July 2025 to $2.85 trillion in the week to 29 October. We explain why in What Are Bank Reserves?

Perli later said that "amid firmer and more volatile repo market conditions, SRP usage became larger and more frequent."

In December 2025, the FOMC said reserves had "declined to ample levels". It began buying Treasury bills to keep them ample, as we cover in Fed Balance Sheet Explained.

The Secured Overnight Financing Rate (SOFR) is the main rate on private overnight loans backed by Treasuries. We explain it in SOFR vs LIBOR. Small gaps between rates are measured in basis points. A basis point is 1/100 of a percentage point.

The chart shows SOFR against the two facility rates since September 2025. SOFR closed above the facility rate on 11 days in October and November 2025. On 31 October 2025, it was 4.22%, 22 basis points above the facility rate of 4.00%.

Since the facility opened, SOFR has closed above its rate on 19 days. All of them fell between October 2024 and December 2025. It has not done so in 2026, up to the latest reading on 6 October.

The chart lists the ten busiest days. On seven of them, SOFR was above the facility rate.

One reason the ceiling leaked is that firms do not borrow the moment market rates pass the facility rate. In surveys reported by the New York Fed in May 2026, the median dealer would consider using the facility once market rates were 10 basis points above its rate. For banks, the median was 25 basis points.

The surveys named two main reasons for holding back. Using the facility adds to a firm's balance sheet costs. The law also requires the Fed to publish each borrower's name two years later.

In 2026, five days have topped $1 billion: 2 January, 17 February, 2 March, 15 April and 30 September. The largest was $30.5 billion, on 17 February.

On 17 February, SOFR was 3.71%, below the facility rate of 3.75%. SOFR is a median, so some of the day's loans paid more. The top 1% of loans by value paid 3.89% or more. Perli said repo operations were used in February, March and April "when market repo rates were just barely above the SRP rate."

On 15 April, the US tax deadline, firms borrowed $10.5 billion. Perli said reserves fell by roughly $300 billion in the weeks around that date, as tax payments flowed into the government's account at the Fed.

August 2026 was quiet. Firms borrowed $0.2 billion over the whole month. SOFR stayed between 3.62% and 3.68%, below the facility rate of 3.75%.

On 30 September, the quarter end, firms borrowed $1.2 billion. SOFR was 3.90%, under the new facility rate of 4.00%.

Perli has said use "may increase around reporting dates". These are the days when banks and dealers report their balance sheets. He said tighter balance sheet limits on those days reduce dealers' capacity to lend in the repo market.

The Standing Repo Facility is the Fed's overnight lending window for dealers and approved banks. It lends at the top of the Fed's target range, which caps overnight rates. It lent little until late 2025. Use peaked at $74.6 billion on 31 December 2025, but has been close to zero in recent months.

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The Standing Repo Facility rate is 4.00%, the top of the Fed's target range of 3.75% to 4%. It took effect on 17 September 2026. The FOMC sets it in the implementation note that comes with each decision. Since the facility opened in July 2021, the rate has always matched the top of the range.

The Standing Repo Facility is open to the 26 primary dealers that trade directly with the Fed, plus approved banks. On 8 October 2026, 47 banks were approved. Borrowers pledge US Treasuries, agency debt or agency mortgage bonds. Individuals and money market funds cannot use it.

The Standing Repo Facility lends cash, while the Overnight Reverse Repo Facility takes cash in. The first lends against bonds at the top of the Fed's range, now 4.00%. In the second, money market funds lend cash to the Fed at the bottom, 3.75%. The first sets a ceiling on overnight rates. The second sets a floor.

Standing Repo Facility use jumped in late 2025 because cash for overnight loans grew scarce. Bank reserves had fallen. SOFR rose above the facility rate on several days. Borrowing hit $50.4 billion on 31 October and a record $74.6 billion on 31 December 2025.

No. The discount window is the Fed's long-standing loan window for banks, which borrow from it directly. The Standing Repo Facility lends through the repo market, to primary dealers and 47 approved banks. Both charge 4.00% today. Perli has noted that a much broader set of banks can borrow from the discount window.

DISCLAIMER: This article is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.