Direct Answer
Overnight Reverse Repurchase Agreement Offering Rate is a daily economic indicator published by Federal Reserve Bank of New York for the United States. It measures the Federal Reserve's administered rate paid to counterparties at its overnight reverse repo facility and is used by investors, economists and policymakers to assess the economic environment. Changes in the indicator can influence monetary policy expectations and asset prices across equities, fixed income and currency markets. This page is an educational guide and does not provide investment advice.
ON RRP Rate: Latest Reading, Historical Chart & Investor Guide
Indicator Snapshot
| Field | Detail |
|---|---|
| Common name | ON RRP Rate |
| Full name | Overnight Reverse Repurchase Agreement Offering Rate |
| Geography | United States |
| Publisher | Federal Reserve Bank of New York |
| Release frequency | Daily |
| Category | Monetary Policy And Rates |
What ON RRP Rate Measures
Overnight Reverse Repurchase Agreement Offering Rate measures the Federal Reserve's administered rate paid to counterparties at its overnight reverse repo facility. The indicator is published by Federal Reserve Bank of New York on a daily basis and is one of the primary datasets used by investors and economists to monitor this area of the economy.
The interest rate the Federal Reserve pays to eligible counterparties that place cash with it overnight through reverse repurchase agreements. It is an administered rate set by the Federal Open Market Committee and quoted in percent.
Why Investors Watch ON RRP Rate
The rate acts as a soft floor for overnight money market rates because eligible lenders can earn it risk free instead of lending cash at lower rates. It is a key tool in how the Fed steers the federal funds rate in an ample reserves regime.
The indicator's impact on financial markets depends on multiple factors: whether the reading was expected, the current economic regime, central bank policy stance, and investor positioning. A single data point is rarely sufficient to draw firm conclusions.
How ON RRP Rate Is Calculated
The FOMC sets the rate in its policy implementation note. The New York Fed runs daily fixed rate operations, accepting any bids at that rate up to a limit, so the award rate equals the offering rate. Eligible counterparties include money market funds, banks, primary dealers and government sponsored enterprises.
The official methodology documentation from Federal Reserve Bank of New York describes the full calculation process including sample design, weighting and revision procedures.
Reference: Federal Reserve Bank of New York: ON RRP Rate data and methodology
Release Schedule and Revisions
ON RRP Rate is typically released daily by Federal Reserve Bank of New York. Release dates are announced in advance through the official release calendar. Investors should monitor both the scheduled release dates and any unscheduled revisions.
Published values in this series are generally not revised after release. The publisher notes any correction or methodology change in its release documentation.
How to Interpret ON RRP Rate Changes
When analyzing ON RRP Rate data, investors should consider multiple dimensions simultaneously:
- This is an administered rate that moves in steps at policy decisions; a change signals a shift in the stance of policy, not a market-driven move.
- It sits at the bottom of the federal funds target range and acts as a floor for overnight rates, so market rates such as SOFR rarely fall far below it.
- Compare it with SOFR and the effective federal funds rate: when market rates drift close to it, usage of the facility tends to rise.
Market Impact of ON RRP Rate
ON RRP Rate can influence multiple asset classes depending on its implications for economic growth, inflation, and monetary policy:
- Equities: Changes in ON RRP Rate can affect earnings expectations, discount rates and sector rotation preferences.
- Fixed income: The indicator may influence Treasury yields and credit spreads depending on its monetary policy implications.
- Currency markets: Divergence in ON RRP Rate across economies can affect relative currency valuations.
- Commodities: Economic activity indicators can affect commodity demand expectations and prices.
Historical Context
Overnight Reverse Repurchase Agreement Offering Rate has a long history that provides context for interpreting current readings. Key reference points include major economic cycles, recessions, recovery periods and policy regime changes. Historical comparison helps investors avoid placing excessive weight on any single data point outside its longer-run context.
Investors should be aware that methodology changes over time can affect comparability across long historical periods. The official Federal Reserve Bank of New York documentation will note any significant definitional or methodological changes.
Limitations of ON RRP Rate
Like all economic indicators, ON RRP Rate has limitations that investors should understand before drawing conclusions:
- Only eligible counterparties such as money market funds and government-sponsored enterprises can use the facility, so it is a floor for them, not for all lenders.
- It is a flat posted rate with no daily market signal; the information is in the facility take-up, which the rate itself does not show.
- No single indicator captures the full complexity of economic conditions, so read this series next to the ones linked below.
Related Economic Indicators
ON RRP Rate is best interpreted alongside related indicators that provide complementary perspectives on the Federal Reserve's administered rate paid to counterparties at its overnight reverse repo facility. Confirming or diverging signals across related indicators help investors form more robust views of the economic environment.
See the Monetary Policy And Rates indicators section and the Macro & Market Regimes hub for broader context and related data.
Frequently Asked Questions
What is ON RRP Rate?
Overnight Reverse Repurchase Agreement Offering Rate is a daily economic indicator for the United States. It is published by Federal Reserve Bank of New York and is used by investors, economists and policymakers to assess the Federal Reserve's administered rate paid to counterparties at its overnight reverse repo facility.
Who publishes ON RRP Rate?
ON RRP Rate is published by Federal Reserve Bank of New York. The official data, release calendar and methodology are available at the Federal Reserve Bank of New York website.
When is ON RRP Rate released?
ON RRP Rate is typically released daily by Federal Reserve Bank of New York. Exact release dates are announced in advance through the official release calendar.
How is ON RRP Rate calculated?
The FOMC sets the rate in its policy implementation note. The New York Fed runs daily fixed rate operations, accepting any bids at that rate up to a limit, so the award rate equals the offering rate. Eligible counterparties include money market funds, banks, primary dealers and government sponsored enterprises. Refer to the official Federal Reserve Bank of New York methodology documentation for the complete calculation procedure.
What does a higher ON RRP Rate reading mean for markets?
A higher ON RRP Rate reading can signal changes in the Federal Reserve's administered rate paid to counterparties at its overnight reverse repo facility. The market impact depends on whether the reading was above or below consensus expectations, the prevailing economic cycle, and current monetary policy context. Investors should not rely on any single data point to drive portfolio decisions.