Fed says it will offer an additional $500 billion in overnight repo funding markets
Source: CNBC
A day after a dramatic move in interest rates, the Federal Reserve on Monday increased the amount of liquidity its 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.
Mondays move comes after the Fed stepped up the operations last week, offering up to $1.5 trillion to an industry hungry for the Feds offerings.
Read more: https://www.cnbc.com/2020/03/16/fed-says-it-will-offer-an-additional-500-billion-in-overnight-repo-funding-markets.html
defacto7
(13,485 posts)ashredux
(2,598 posts)The FED has only so many arrows in their quiver
We may need some shots later and they will be empty
sandensea
(21,596 posts)They "print" the money - like the $20 trillion the Fed created to bail out Wall Street after the '08 derivatives debacle.
It may not look good - but Thank Goodness they can still do that without crashing the dollar. Or we'd be in an Argentina situation faster than you can say Tango Foxtrot.
defacto7
(13,485 posts)It just seems that the bottom line is, are people buying anything, going anywhere, spending at all? Not much. I suspect that no matter how much you pump the markets it will always fall back to the actual trade between businesses, suppliers, transportation and consumers. If those aren't happening and it's probably not going to increase for some time then I don't quite understand how this will help in the long run. Short stimulus, I get it, worldwide compression, I'm at a loss.
This is something I'd like to understand, it's not my best subject.
sandensea
(21,596 posts)But yes, it would be nice if the Fed could print some of those almighty dollars to, say, write off student debt, help those who'll lose their jobs due to this crisis with their mortgages, etc.
defacto7
(13,485 posts)or bought bonds or dropped the rate so low the downward movement would be worse? I think they scared the investors. But pumping it into the public sector? Sounds good to my unprofessional ear.
yaesu
(8,020 posts)spent helping people who are now out of work for the foreseeable future & there are millions of them.
kairos12
(12,841 posts)Bengus81
(6,928 posts)yaesu
(8,020 posts)wishstar
(5,268 posts)However a few weeks ago data was reported that businesses and individuals have extremely high level of debt and historically high credit card debt.
ashredux
(2,598 posts)Iliyah
(25,111 posts)BumRushDaShow
(128,406 posts)It's useless unless the business take that and pay their employees who will be out of work.
DBoon
(22,338 posts)didn't work in 1932
Won't work now
jalan48
(13,840 posts)TheFourthMind
(343 posts)richdj25
(162 posts)lost their jobs and don't have health insurance?
Iwasthere
(3,152 posts)And NOT a payroll tax! $3000 in our pockets would actually help the markets.
LiberalArkie
(15,703 posts)The CEO's and banksters came out of it great.
Socialism for the corporations and ultra-wealthy is fine.
beachbumbob
(9,263 posts)PPT has NO oversight by Congress and it all saddles the treasury
IronLionZion
(45,380 posts)I suspect a lot of Dolt 45's dumber supporters were buying high before the crash.
Damn I wish Obama (or Biden) were leading this country now. Sensible people would feel much more reassured.
JT45242
(2,240 posts)I heard multiple experts on NPR and MSNBC over the weekend say that liquidity isn't the issue. There is plenty of liquid money already out there. Dropping the interest rates and doing this won't change anything.
These are moves to give tRUMP the opportunity to say that he is doing something. Not the 'somethings' that will make a difference to flatten the curve and save lives, but something.
This is more of rearranging the chars and polishing the brass on the titanic.
Grasping at straws to try to prevent the collapse of the stock markets.
Bengus81
(6,928 posts)Let me guess what Turtle and other Pugs will say--SOCIALISM at it's WORSE!!!
yaesu
(8,020 posts)Under The Radar
(3,401 posts)And make the application process streamlined and no waiting period.
- A stay on cut offs and evictions
- No patient turned away despite coverage.
- Open the food programs back up immediately
There is a model for crisis management that was put in place by the Obama Administration, except this time the banks need no money.