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Bill Dudley

Get a Grip. The Fed Can Handle the Repo Market

The central bank has plenty of options.

Chill out.

Chill out.

Photographer: Hauke-Christian Dittrich/DPA/Getty Images

One of the world’s most important interest rates has had a tumultuous week. Thanks to a sudden shortage of dollars in a separate market, the federal funds rate – the focal point of the U.S. Federal Reserve’s monetary policy – briefly breached the 2%-to-2.25% range that the central bank was targeting.

The aberration has generated a lot of concern. My advice: Don’t worry, the Fed can handle it.