The purpose of the [full-allotment overnight reverse repo] facility is to establish a floor on money market rates and to improve the implementation of monetary policy even when the balance sheet is large. Even if our balance sheet increases significantly further and stays very large for many years, it will be useful to have this facility available to improve monetary policy control.
After a quiet announcement on September 25 via their July 30-31 meeting minutes, the Federal Open Market Committee has implemented a test of a full-allotment overnight reverse repo facility. This facility is intended to exert more control over the money the Fed has been injecting into the financial system, and give them better influence over interest rates.