LounDebnc: NY Fed to extend operations to pump money into markets through Nov 4
The Fed will conduct daily and 14-day repo operations through November 4
— extending until after the next interest rate announcement (AFP Photo/Eva
New York (AFP) – The New York Federal Reserve Bank said Friday it will
continue to inject billions into the US financial plumbing on a daily basis
through November 4, extending the operations by three weeks.
The effort, begun in mid-September, is aimed at preventing a spike in
short-term interest rates, the New York Fed said in a statement.
Rates spiked last month as banks struggled to find the cash needed to
meet reserve requirements, prompting the Fed to pump billions into US money
It announced daily operations which were due to end October 10, but even
then demand exceeded supply on some days.
In Friday’s announcement, the New York Fed said it will continue to offer
up to $75 billion a day in repurchase agreements — exchanging secure assets
for cash for very short periods — as well as 14-day “repo”
operations twice a week of at least $35 billion each.
Economists say an array of conditions converged to dry up liquidity in
the banking system — including quarterly corporate tax payments and a surge in
government debt sold to investors, which drained cash out of banks.
Banks borrow regularly in markets for very short periods, usually
overnight, to make sure their daily cash reserves do not fall below the
required level. But interest rates increase with demand.
The New York Fed adds or removes liquidity to keep interest rates in line
with the desired target, but the cash shortage last month prompted it to pump
funds into the short-term repo market as rates threatened to break out of the
target range set by the Fed’s policy-setting Federal Open Market Committee.
The central bank cut benchmark lending rates last month and many expect
another rate cut on October 31 at the next FOMC meeting.
“The operation schedule and parameters are subject to change if
market conditions warrant or should the FOMC alter its guidance to the
desk,” the New York Fed said Friday.
Economic Collapse News –
The Fed Extends Repo Operations Through Nov, Retail Job Cuts 2019
Silver Report Uncut: Oct 5, 2019
Economic collapse news. So we had a lot of data this week. We’ll start
with the Fed’s repo operations as they plan to continue through November 4th
2019. The original story was the banks were short on liquidity due to the end
of the quarter. The quarter ended and we are still having liquidity issues. We
see the Canadian manufacturing PMI fell into contraction. We also have a
breakdown of the jobs data and the bad news the BLS payroll report details