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Fed Under Fire for Silent Liquidity Surge as RRP Plunges 94%
The Federal Reserve is under scrutiny as the Reverse Repo Facility (RRP) has seen a drastic drop of nearly 94%. This sudden change in liquidity could have significant implications on the global financial markets.
As of April 2025, Bitcoin’s price plummeted below $75,000, wiping out over $500 billion in total market value. The crypto market is already showing signs of weakness due to the recent tariff wars and inflation fears.
The RRP, which has been draining liquidity at an alarming rate, has sparked concerns about the potential for a stealth easing cycle. Some analysts believe that this unexpected shift could be a sign that the Federal Reserve may need to take action soon to stabilize the market.
It is essential to note that the U.S. government needs to pay back or replace $6.5 trillion in debt by issuing new Treasury bonds. However, if interest rates continue to rise due to China’s sale of US Treasuries, refinancing this massive debt becomes much more expensive.
According to Peter Duan, a Twitter user who goes by the handle @tradingwithPeter, “Trump forces tariff wars to lower the 10Y Treasury rate… China dumps US Treasuries to push yield up.” This unexpected move is putting immense pressure on the U.S. government’s ability to refinance its debt.
It seems that institutional investors have started to withdraw their funds from the Reverse Repo Facility as a result of this sudden change in liquidity, and these flows are having a profound impact on financial markets.
Source: https://coinchapter.com/fed-under-fire-for-silent-liquidity-surge-as-rrp-plunges-94/?utm_source=rss&utm_medium=rss&utm_campaign=fed-under-fire-for-silent-liquidity-surge-as-rrp-plunges-94
