A Federal Reserve Board note published July 18, 2025 explains how data on Fedwire payments can identify when U.S. reserves are ample. The authors construct a ratio of reserves to Fedwire transfers and examine its relationship with the spread between the effective federal funds rate (EFFR) and the interest on reserve balances (IORB). Structural‑break analysis pinpoints two dates: October 2018 and April 2020. When reserves fall below about 65 % of Fedwire payments, the EFFR‑IORB spread widens and becomes sensitive to reserve changes, indicating a shift from ample to scarce reserves. The study finds that when the spread is roughly one basis point below the IORB rate, reserves at 65 % of payments represent the minimal ample level, offering a publicly available indicator for monitoring reserve adequacy.
null
https://www.federalreserve.gov/econres/notes/feds-notes/what-can-public-fedwire-payments-data-tell-us-about-ample-reserves-20250718.html
Made by AI. If you spot anything of concern write us at contact@cybach.com. We’ll promptly correct irregularities.