Posted on 03/16/2020 10:52:17 AM PDT by Enlightened1
A day after a dramatic move in interest rates, the Federal Reserve on Monday increased the amount of liquidity it’s offering in short-term lending to the financial industry.
In a mid-day announcement, the New York Fed said it will conduct a $500 billion repo operation this afternoon, another move targeted at keeping money flowing through the system. Repo involves banks putting up high-quality collateral like Treasurys in exchange for the liquidity they need to conduct operations.
Monday’s move comes after the Fed stepped up the operations last week, offering up to $1.5 trillion to an industry hungry for the Fed’s offerings.
The operation will have a same-day settlement, running from 1:30 to 1.:45 p.m. The minimum bid rate is 0.1%.
The move comes a day after the Fed cut its benchmark interest rate by 1 percentage point to a range of 0%-0.25%, where it was during the financial crisis. In addition, the central bank offered a number of other measures aimed at providing necessary funding to banks and the free-flow of currency swaps between the Fed and other global central banks.
The Fed also announced a round of asset purchases totaling $700 billion along the lines of its quantitative easing measures taken during the crisis. In Monday morning operations, the New York Fed trading desk bought $27 billion of Treasurys
(Excerpt) Read more at cnbc.com ...
This coup attempt (the cold nobody has) sure has a hefty price tag.
So what. Who cares?
So FR experts, is there an issue with keeping money flowing?
“...another move targeted at keeping money flowing through the system.”
It just struck me - I heard a month or so ago that some believe Trump is going to simply destroy the Fed. I wonder if this has anything to do with that.
Are you being sarcastic?
It is collapsing when you have to print more and more money to keep it up.
The money you have is becoming worth less. Here look at this, and play with the numbers and years.
https://www.in2013dollars.com/us/inflation/1970?amount=20
No one is looking to make huge investments when we are living in uncertainty.
After decades of study of the Depression by academic economists, the lesson that the Fed and the world’s central bankers took to heart was that in a crisis, they should give priority to acting as lenders of last resort. That means providing enough money to assure that financial markets do not seize up and begin triggering defaults and bankruptcies.
It’ll be kinda interesting to start paying for a hamburger with the new 10,000 dollar bill...
Bingo!
Just fiat money created out of thin air, good wishes and ‘faith’ in the us govt.
Ha.
What a relief. At least the big banks won’t lose anything. /sarc
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