The Federal Reserve Bank of New York added $70.2 billion in temporary liquidity to financial markets.
The Fed's money-market operations are aimed at ensuring that the financial system has enough liquidity and that short-term borrowing rates are stable and consistent with Fed goals, with the central bank's federal-funds rate staying within the 1.5%-to-1.75% target range.
In the postcrisis era, the Fed is operating with a system where banks hold substantial amounts of reserves, both for regulatory reasons and by their own choice.
The Fed has been intervening in markets in the current fashion since mid-September, when short-term rates unexpectedly shot up on a confluence of factors, the biggest of which stemmed from corporate-tax payments and the settlement of Treasury debt auctions.
The Fed has used similar operations for decades to manage short-term rates.
The Fed is using temporary operations to tamp down any possible wild moves, while purchasing Treasury bills to build up reserves in the banking system.
Central bankers have indicated they are still learning what level of reserves the financial system needs, which adds an element of uncertainty to the longer-term outlook for Fed market interventions.
https://www.wsj.com/articles/fed-pumps-70-2-billion-in-short-term-liquidity-into-markets-11575993443
The Fed's money-market operations are aimed at ensuring that the financial system has enough liquidity and that short-term borrowing rates are stable and consistent with Fed goals, with the central bank's federal-funds rate staying within the 1.5%-to-1.75% target range.
In the postcrisis era, the Fed is operating with a system where banks hold substantial amounts of reserves, both for regulatory reasons and by their own choice.
The Fed has been intervening in markets in the current fashion since mid-September, when short-term rates unexpectedly shot up on a confluence of factors, the biggest of which stemmed from corporate-tax payments and the settlement of Treasury debt auctions.
The Fed has used similar operations for decades to manage short-term rates.
The Fed is using temporary operations to tamp down any possible wild moves, while purchasing Treasury bills to build up reserves in the banking system.
Central bankers have indicated they are still learning what level of reserves the financial system needs, which adds an element of uncertainty to the longer-term outlook for Fed market interventions.
https://www.wsj.com/articles/fed-pumps-70-2-billion-in-short-term-liquidity-into-markets-11575993443
No comments:
Post a Comment