New York Fed to Test Fixed-Rate Reverse Repos as Tool for Exit
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The Federal Reserve Bank of New York will begin testing an overnight fixed-rate reverse repurchase facility as soon as next week as an additional tool to aid policy makers when they eventually seek to raise interest rates and tighten monetary policy.
“This exercise may be somewhat larger in size than past operational exercises and will be ongoing for at least a period of weeks to gain operational experience with larger transactional flows and to provide additional information about how such operations might improve interest rate control regardless of the size of the Federal Reserve’s balance sheet,” the New York Fed said in a statement today.