The Federal Reserve Bank of New York injected $104.15 billion in temporary liquidity into financial markets Thursday.
The intervention came in two parts. One was via a term-repurchase-agreement operation that will last for 15 days that added $30.65 billion. The other was via a one-day repo operation that totaled $73.5 billion.
Fed repo interventions take in Treasury and mortgage securities from eligible banks in what is effectively a loan of central bank cash, collateralized by dealer-owned bonds. Last month, the Fed ramped up its repo operations for the first time in over a decade to help tame spiking short-term borrowing costs.
This week there has been some upward pressure in short-term rates, which some observers have attributed to the settlement of Treasury debt auctions and other factors. The effective fed funds rate has been, at 1.90% on Wednesday, trading toward the higher end of the fed’s range of 1.75% to 2%.
On Wednesday, the Fed also began buying large amounts of Treasury bills to help expand the size of its balance sheet as part of a longer-term solution for money-market volatility.
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