What Is SRF Usage?

What is SRF Usage?

Standing Repo Facility (SRF) is tracked in our framework because it captures a distinct dimension of US dollar liquidity. In our 4-tier DLI scoring model, it contributes to the composite liquidity assessment through its assigned sub-index tier.

The indicator uses a "higher_worse" direction, meaning rising values signal tightening liquidity conditions. This directional assignment is based on the historical relationship between the indicator's movement and subsequent risk asset performance.

Daily aggregate of accepted SRF operations from NY Fed.

Why SRF Usage matters for risk assets

Changes in SRF Usage influence the broader liquidity environment through both direct and indirect channels. Directly, it affects the cost or availability of funding. Indirectly, it shifts market expectations about future policy or credit conditions.

For Bitcoin and equities, the impact is most visible when SRF Usage moves to extreme z-scores (above +1.5 or below -1.5). At these levels, the historical correlation with risk asset returns strengthens significantly. Moderate moves within the normal range tend to have weaker predictive power.

Cross-reference with SOFR-IORB, ON RRP, VIX for multi-indicator confirmation. The strongest signals come when multiple related indicators move in the same direction.

How to interpret daily updates

On the indicator detail page, follow this 3-step process:

Step 1: Check the percentile (5Y) to understand historical context. Above the 75th percentile is noteworthy; above the 90th is extreme. Step 2: Review the 7-day and 30-day trend direction — trend matters more than any single reading. Step 3: Check the homepage score card to see if this indicator is listed as a key driver and in what direction.

Pay attention to score transitions: when SRF Usage shifts from tightening to easing contribution (or vice versa), it often coincides with broader score shifts that create investable signals.

Common mistakes and better workflow

Mistake: Overweighting a single indicator. SRF Usage is only one component within its sub-index tier. Two indicators with combined 30% weight disagreeing with it should give you pause.

Better workflow: Start with the score reading on the homepage. Then check the top drivers. Only then drill into SRF Usage if it's flagged as significant. This top-down approach prevents single-indicator tunnel vision. Combine with SOFR-IORB, ON RRP, VIX for the most complete assessment.