Fed Offers More Than $5 Trillion of Liquidity to Quench Markets
- New York branch announces weekly $500 billion 1-, 3-month ops
- ‘The Fed just brought an aircraft carrier to a knife fight’
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The Federal Reserve ramped up the amount of cash it’s prepared to inject into funding markets over the next month, promising a cumulative total above $5 trillion, in a signal that officials will do whatever it takes to keep short-term financing rates from spiking.
In the third upsizing of its repo schedule this week, the Fed’s New York branch on Thursday offered $500 billion in a three-month repo operation amid signs that the financial impact of the coronavirus outbreak was starting to strain borrowing markets as well as trading in U.S. Treasuries. The bank will repeat that exercise Friday along with a $500 billion one-month operation, and it plans to offer that amount on 10 occasions in total in the next month.