This is cash being sucked out of the system by the Fed. Reverse Repo is a Reverse Repurchase agreement that, in exchange for cash, The Fed stuffs securities at the 99 Financially Significant Institutions, which include members of the Primary Dealer list, and takes their idle cash, overnight, or for the duration stated (2-3 days), and agree to buy those same securities back at the stated time.

IT is cash being REMOVED from the banking system, or a stealth tightening. Follow the below Pro for all these types of habbeneings.

Scott Skyrm

@ScottSkyrm

RRP vol shot up to over $2T on Monday, but there's nothing to worry about. RRP vol increased due to the influx of GSE cash into the market this week. RRP vol will continue to decline over the next few weeks as B/S runoff begins in June. Overall, the trend in RRP vol is lower

https://twitter.com/ScottSkyrm/status/1529777931748315138