Jump to content

NY Fed spends $53 billion to rescue overnight lending market


Recommended Posts

2 hours ago, CayceG said:

 

How *should* it happen? And why is this bad?

The operations of the central bank were originally decoupled from the operations of the treasury to avoid the latter directly controlling the former, allowing the central bank to focus exclusively on responsibly managing the money supply and (hypothetically) the value of the dollar.  If the treasury directly controlled the central bank, the management of the money supply and the value of the dollar would be subjected to the short-term political interests of whatever administration held the White House.

 

Of course, it’s naive to think the White House holds absolutely no sway over the Fed’s decisions, but even marginal independence allows the financial markets to have faith in the dollar.

 

Without this independence, it’s very likely markets would soon lose faith in the future stability of the dollar, dump their dollar holdings, and send the exchange rate plummeting into an inflationary nightmare.

  • Thanks 2
Link to comment
Share on other sites

19 minutes ago, sblfilms said:

I’m not entirely convinced as to what is being suggested is actually happening. We shall see!

Considering the strength of the dollar, I don’t think the financial markets are convinced either.  I’m hoping that doesn’t change, regardless of what the truth is.

 

But, indeed, we shall see.

Link to comment
Share on other sites

Another $105 billion pumped in.

Quote

The New York Fed continued its streak of market repurchase agreements, or repos, selling $75 billion of overnight repos and $30 billion of repos expiring in 14 days. Banks bid for $80.2 billion in overnight repos and $62 billion in 14-day repos, signaling strong demand in the government-backed investments.

 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    • No registered users viewing this page.
×
×
  • Create New...