Definition
A Fed facility where institutions park excess cash overnight. High ONRRP means idle liquidity; draining ONRRP releases cash into markets.
Money market funds are the primary users of ONRRP. The facility peaked at $2.55T in December 2022 and has since drained to under $200B. This $2T+ drainage was a major liquidity tailwind for risk assets in 2023-2024. ONRRP is part of the Policy/Reserves tier (30% weight) in the DLI model. The ONRRP rate (set by the Fed) acts as a floor for short-term rates.