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Fed Overnight Reverse Repo Rate in June 2026 Explained

The Federal Reserve’s standing overnight reverse-repurchase offering rate was 3.50% from June 18, 2026, with a $160 billion daily limit per counterparty. The facility helps place a floor under overnight money-market rates and is separate from the federal funds target range.

Timeline

  1. 2026-06-17: The FOMC kept the federal funds target range at 3.50% to 3.75%.
  2. 2026-06-18: The 3.50% standing overnight reverse-repo offering rate and $160 billion per-counterparty limit took effect.
  3. 2026-07-03: The New York Fed did not conduct operations because of the recommended holiday market close.

The Federal Reserve set the standing overnight reverse-repurchase offering rate at 3.50 percent effective June 18, 2026. The Federal Open Market Committee’s implementation note also kept a $160 billion daily limit for each counterparty. This was an operating rate used by the New York Fed’s Open Market Trading Desk, not the interest rate charged on consumer loans and not the same thing as the entire federal funds target range. [1][2]

In an overnight reverse repo, the New York Fed sells a Treasury security to an eligible counterparty and agrees to buy it back later, usually the next business day. Economically, the transaction resembles secured borrowing by the Federal Reserve. Cash temporarily leaves the private counterparty and the financial system receives Treasury collateral, then the transaction reverses at maturity and the counterparty earns the operation’s stated rate. [2][3]

The facility helps implement monetary policy by limiting downward pressure on overnight interest rates. Money-market funds, government-sponsored enterprises, banks and primary dealers that meet eligibility rules can place cash at the offered rate instead of accepting materially lower returns elsewhere. That alternative can help form a floor under money-market rates, although the relationship is operational rather than a guarantee that every private overnight rate will equal the offering rate. [2][3]

The June decision sat alongside a federal funds target range of 3.50 to 3.75 percent. The Fed maintained the interest paid on reserve balances at 3.65 percent and set the standing overnight repo rate at 3.75 percent. These tools address different sides of the market: reverse repos absorb cash and help limit downward pressure, while standing repos supply cash against eligible securities and help limit upward pressure. [1][4]

An offering rate is not the same as the amount used. The FOMC established the price and maximum per counterparty, but eligible institutions decide how much to submit based on market alternatives. The New York Fed publishes daily operation results showing submissions, accepted amounts and rates. A day with low take-up does not mean the facility disappeared; it can mean counterparties found comparable or better uses for their cash. [2][5]

The word ‘overnight’ normally means the transaction matures on the next business day, but calendars can extend the actual number of days. For the July 3, 2026 recommended market close, the New York Fed said it would conduct no operation that day and that trades executed July 2 would mature July 6. That scheduling detail did not change the June policy rate; it reflected the market holiday timetable. [5][6]

The concise June 2026 answer is therefore 3.50 percent, effective June 18, with a $160 billion daily cap per counterparty. The figure belongs to the standing overnight reverse-repo facility and should be labeled that way. Investors and borrowers should not use it as a substitute for the federal funds effective rate, Treasury yields, bank deposit rates or personal borrowing rates, each of which is determined differently. [1][2][3][5]

Sources

  1. Federal Reserve — Implementation note issued June 17, 2026
  2. Federal Reserve Bank of New York — Repo and reverse repo agreements
  3. Federal Reserve Bank of New York — Reverse repo operations FAQ
  4. Federal Reserve — June 2026 FOMC statement
  5. Federal Reserve Bank of New York — Reverse repo operation results
  6. Federal Reserve Bank of New York — July 3, 2026 operations schedule

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