Statement Regarding Repurchase Operations
newyorkfed.org
Statement Regarding Repurchase Operations
1–10 of 141 posts
Re: Statement Regarding Repurchase Operations
#2Additionally, three overlapping 14-day term operations of atleast $30 billion each.
Adding it together we can see the fed is going to be providing a minimum of $165B in total liquidity to the market while all the operations are undergoing.
Curious how this will play out in the long term. Are we going to add even more liquidity when these operations end?
Re: Statement Regarding Repurchase Operations
#3Smoke and mirrors and games...
Re: Statement Regarding Repurchase Operations
#4I wish I understood what this meant. From my primitive understanding, we have too much money concentrated in too few people trying to make unrealistic returns, so they hold on to it rather than invest it.
Does this move mean that the fed is trying to keep its benchmark rate too low and absent market forces it would be much higher?
Re: Statement Regarding Repurchase Operations
#5Additionally, three overlapping 14-day term operations of atleast $30 billion each. Adding it together we can see the fed is going to be providing a minimum of $165B in total liquidity to the market while all the operations are undergoing. Curious how this will play out in the long term. Are we going to add even more liquidity when these operations end?
So nice of the Fed to help the banks mark the close of the quarter.
Re: Statement Regarding Repurchase Operations
#6I wish I understood what this meant. From my primitive understanding, we have too much money concentrated in too few people trying to make unrealistic returns, so they hold on to it rather than invest it. Does this move mean that the fed is trying to keep its benchmark rate too low and absent market forces it would be much higher?
From what I've been able to gather, there has been a decrease in demand for US Treasurys from certain segments of the market. This has resulted in primary dealers having to purchase the difference. They don't purchase USTs from cash on hand. Instead, they use the repo market to fund the purchase. However, the supply of repo market funds is relatively inelastic. Thus, you have a big spike in repo demand with a relatively fixed supply. This was causing the rate spikes we saw. Thus the Fed stepping in as lender of the last resort.
Re: Statement Regarding Repurchase Operations
#7Additionally, three overlapping 14-day term operations of atleast $30 billion each. Adding it together we can see the fed is going to be providing a minimum of $165B in total liquidity to the market while all the operations are undergoing. Curious how this will play out in the long term. Are we going to add even more liquidity when these operations end?
I wish the fed would print some money for me to help pay my student debt
Re: Statement Regarding Repurchase Operations
#8I wish I understood what this meant. From my primitive understanding, we have too much money concentrated in too few people trying to make unrealistic returns, so they hold on to it rather than invest it. Does this move mean that the fed is trying to keep its benchmark rate too low and absent market forces it would be much higher?
Every action is an attempt to stimulate positive economic activity by increasing liquidity and decreasing volatility. Despite the various descriptions that can be used they all essentially create money, causing inflation, which incentivizes not holding on to money.
In theory this affects all equally but in practice and in agreement with recent memory, losing X% of a small amount to inflation or wage stagnation (i.e. what you or I experience) is more negatively impactful than a large player losing that same relative amount.
Re: Statement Regarding Repurchase Operations
#9Wow this is not good. Repo market is the market of overnight debt between banks. Banks lend money to each other to cover their collateral needs/exposures at the end of each day. If banks lose confidence in each other, they start demanding more collateral from each other in the overnight market, which means the overnight rate goes up. The NYFed is trying to keep interest rates down and is having trouble doing it. As a result, it's having to take some extraordinary measures to the tune of injecting $100b into banks, every night, for the next month. They are basically trying to ensure that no bank gets caught with it's shirt off, while the banks are signaling that they think their peers might be naked.
Re: Statement Regarding Repurchase Operations
#10Additionally, three overlapping 14-day term operations of atleast $30 billion each. Adding it together we can see the fed is going to be providing a minimum of $165B in total liquidity to the market while all the operations are undergoing. Curious how this will play out in the long term. Are we going to add even more liquidity when these operations end?
I wish the fed would print some money for me to help pay my student debt
There are presidential candidates essentially promising just that.