Fed Injects $99.9 Billion Into Markets Tuesday -- Update
23 October 2019 - 3:13AM
Dow Jones News
By Michael S. Derby
The Federal Reserve Bank of New York injected $99.9 billion in
temporary liquidity and $7.5 billion in permanent reserves into
financial markets Tuesday.
The short-term intervention came via $64.90 billion in overnight
repurchase agreements with eligible banks, and with a $35 billion
repo operation that will run through Nov. 5.
The banks didn't take all the liquidity offered by the Fed in
the overnight repo operation, but they offered more than the Fed
would take for the term operation, with $52.2 billion submitted to
the Fed.
The Fed's purchase of Treasury bills, designed to boost the size
of its nearly $4 trillion balance sheet, drew good interest from
banks, which sought to sell the central bank $41.472 billion in
short-dated government debt.
Tuesday's intervention is part of an effort to help tame
volatility in short-term rate markets with temporary and permanent
injections of liquidity.
The Fed's repo operations take in Treasury and mortgage
securities from eligible banks in what is effectively a loan of
central bank cash, collateralized by dealer-owned bonds. The Fed's
bill buying permanently increases the size of the Fed's holdings
and further ensures money markets operate smoothly.
The Fed injected $58.15 billion in overnight liquidity into
financial markets on Monday.
Write to Michael S. Derby at michael.derby@wsj.com
(END) Dow Jones Newswires
October 22, 2019 11:58 ET (15:58 GMT)
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