Accessible Version
What can public Fedwire payments data tell us about ample reserves? Accessible Data
Figure 1. Reserves, Fedwire Payments, and Reserves as a Share of Fedwire Payments
This figure displays a time series chart from January 2015-March 2025 of monthly fedwire payments, reserves, and reserves as a share of fedwire payments. The left y-axis is in trillions of dollars, spanning from 1 to 5; the right y-axis is in share, spanning from 0.4 to 1.2. Fedwire payments and reserves are on the left scale and reserves as a share of fedwire payments is on the right scale. Shaded areas from October 2017 to July 2019 and June 2022 through the end of the x-axis represent the 2017 and 2022 balance sheet runoff periods, respectively. The figure shows that reserves and Fedwire payments are closely correlated. During the 2017 balance sheet runoff period, reserves declined more quickly than payments and reserves as a share of Fedwire payments decreased from 0.73 to 0.56. In 2020, reserves sharply increased, resulting in reserves as a share of Fedwire payments moving from 0.48 to 0.79 from March 2020 to April 2020. Over the on-going 2022 balance sheet runoff, reserves have changed little and reserves as a share of Fedwire payments has ranged from 0.68 to 0.81.
Notes: Reserves is the weighted monthly average of reserves from the weekly H.4.1 release. Fedwire Payments is the average daily value of transfers sent across Fedwire over each month. The shaded regions represent the 2017 and 2022 balance sheet runoff periods. Data covers the period January 2015 to March 2025.
Source: Federal Reserve Board, H.4.1; Fedwire Funds Service.
Figure 2. EFFR-IORB Spread and Reserves as a Share of Fedwire Payments
This figure shows a time series chart from January 2015-March 2025 of the EFFR-IORB spread and reserves as a share of Fedwire payments (both at a monthly frequency). The left y-axis scale is in basis points, ranging from -15 to 10; the right y-axis is in share, ranging from 0.4 to 1.2. EFFR-IORB is on the left scale and reserves as a share of Fedwire payments is on the right scale. There are two vertical black dashed lines at October 2018 and April 2020, representing structural breaks in the relationship between EFFR-IORB and reserves as a share of Fedwire payments (as discussed in Section 4). From January 2015 to September 2018, the EFFR-IORB spread increased while reserves as a share of Fedwire payments was fairly stable. Starting in October 2018 we see a negative relationship: reserves as a share of Fedwire payments decline and the EFFR-IORB spread increases. In April 2020, reserves as a share of Fedwire payments increase sharply to about 0.8 and stayed between about 0.9 and 1.1 until 2022. The share decreased in 2022 and it has ranged from 0.68 to 0.81 since then. Since September 2021, the EFFR-IOR spread has been flat at minus 7 basis points.
Notes: EFFR-IORB is the monthly average of the daily spread between the effective federal funds rate (EFFR) and interest on reserve balances (IORB). EFFR is released daily by the Federal Reserve Bank of New York and IORB is released daily by the Federal Reserve Board of Governors. Note that prior to July 29th, 2021, IOER (interest on excess reserves) is used for IORB; from July 29th, 2021 onward, IORB (interest on reserve balances) is used. Reserves is the weighted monthly average of reserves from the weekly H.4.1 release. Fedwire Payments is the average daily value of transfers sent across Fedwire over each month. The vertical dashed lines represent structural breaks (2018m10 and 2020m4) in the relationship between the plotted series (see Section 4). Data covers the period January 2015 to March 2025.
Source: Federal Reserve Bank of New York; Federal Reserve Board, Interest Rate on Reserve Balances; Federal Reserve Board, H.4.1; Fedwire Funds Service.