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I believe it is reverse repos [1] they are referring to.

"When the Desk conducts an overnight RRP, as in the current ON RRP exercise, it is selling an asset held in the System Open Market Account (SOMA) with an agreement to buy it back on the next business day. This leaves the SOMA portfolio the same size, as securities sold temporarily under repurchase agreements continue to be shown as assets held by the SOMA in accordance with generally accepted accounting principles, but the transaction changes some of the liabilities on the Federal Reserve’s balance sheet from deposits to reverse repos while the trade is outstanding."

[1] https://www.newyorkfed.org/markets/rrp_faq.html




They released their implementation note here [1]. The Fed completely uncapped the ON RRP program, along with pushing IOER up to 50 basis points as expected. Fed is sending a signal that they will use RRP to keep the FF rate near their target by any means necessary.

[1] http://www.federalreserve.gov/newsevents/press/monetary/2015...


Yes, they're using reverse repos to enforce the lower end of the range (0.25%) and the interest on reserves to enforce the upper end (0.5%).

More detail here: http://www.bloomberg.com/news/articles/2015-12-16/fed-remove...




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