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What can public Fedwire payments data tell us about ample reserves?

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Abstract

We first construct a novel indicator of reserve ampleness based on data on interbank payments over the Fedwire Funds Service: the share of reserves to Fedwire payments as a proxy for the demand for reserves for payment purposes. We then explore the relationship between this indicator and the price of reserves, the spread between the effective federal funds rate (EFFR) and interest on reserves (IORB), to identify structural breaks and back out the minimum level of ample reserves as a share of Fedwire payments and the corresponding EFFR - IORB spread. We find that fed funds trading slightly below the interest on reserves and reserves at about 65 percent of Fedwire payments are consistent with minimum level of ample reserves.

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  • Erin E. Syron Ferris & Amy Rose & Manjola Tase, 2025. "What can public Fedwire payments data tell us about ample reserves?," FEDS Notes 2025-07-18-3, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfn:2025-07-18-3
    DOI: 10.17016/2380-7172.3807
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