Fed Adds $76.6 Billion in Overnight Liquidity
Repo operation is aimed at ensuring financial system has enough liquidity
The New York Fed added $76.583 billion in liquidity to financial markets Monday.
The injection came by way of an overnight repurchase-agreement operation. In it, the Fed took in $66.833 in Treasurys and $9.750 billion in mortgage debt.
Fed repo interventions take in Treasury and mortgage securities from eligible banks in what is effectively a short-term loan of central-bank cash, collateralized by dealer-owned bonds. The Fed’s interventions are aimed at ensuring the financial system has enough liquidity and short-term borrowing rates remain well behaved.
The Fed recently increased the sizes of its temporary operations as the month’s end and this week’s rate-setting Federal Open Market Committee meeting approach. Fed data released Monday showed short-term rates are near where central bankers expected them to be.