Fed RRP usage drops to $675M on Friday

The continued slide in RRP usage toward negligible levels signals that the facility's role as a liquidity sponge has effectively ended, reflecting ample cash in the system seeking higher-yielding alternatives. This matters for money markets and short-term rates, as it underscores how the Fed's balance sheet runoff has normalized funding conditions. The open question is whether this floor of demand holds or if a sudden liquidity squeeze could revive usage, which would warrant monitoring as reserve levels continue to decline.