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Fed Injects Liquidity Into Markets as Key Rate Busts Through Cap

  • Effective fed funds rate hits 2.30%, topping the 2.25% limit
  • But the repo rate, another important benchmark, did calm down
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N.Y. Fed Takes $75 Billion of Securities, Treasuries in Repo Op
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The Federal Reserve injected $75 billion into U.S. money markets as policy makers’ benchmark rate broke outside their preferred band, ratcheting up the pressure on central bank officials to find a long-term fix for the financial system’s plumbing.

There is evidence things are calming down. For instance, the rate for general collateral repurchase agreements has dropped to 2.175%, down from Tuesday’s record high of 10% and about where it was last week.