Half a trillion dollars is sitting at the Fed earning nothing

THERE’S so much spare cash sloshing around US funding markets that investors are choosing to park almost half a trillion dollars at the central bank – earning absolutely nothing.

Usage of the Federal Reserve’s reverse repo facility – a mechanism that’s part of the central bank’s arsenal for helping to steer short-term interest rates – surged on Thursday to an unprecedented US$485.3bil (RM2.01 trillion).