Fed to spend $1.5T to pump liquidity into financial markets amid coronavirus panic
By Sylvan Lane - 03/12/20 02:05 PM EDT
The Federal Reserve Bank of New York announced Thursday that it will spend $1.5 trillion to purchase financial assets in a titanic bid to pump cash into the bond market amid panic on Wall Street.
The New York Fed said in a Thursday statement it will drastically increase the scale of its repurchase (repo) agreements, during which it buys Treasury bonds and other securities from banks and traders with an agreement to sell the product back with interest the following day or soon after.
It will offer $500 billion in repo operations on Thursday followed by $1 trillion in repo agreements Friday “to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak.â€
The decision to dramatically increase the scale of Fed repo operations came “pursuant to instruction†from Federal Reserve Chairman Jerome Powell, the New York Fed said in a statement.
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https://thehill.com/policy/finance/487279-fed-to-spend-15t-to-pump-liquidity-into-financial-markets-amid-coronavirus
