Fed is taking drastic steps to inject more liquidity into the banking system as markets begin to show signs of stressThe Federal Reserve Bank of New York. Picture: REUTERS/CARLO ALLEGRI
The central bank will offer $500bn in a three-month repo operation on Thursday. It will offer an additional $500bn in one-month repo and $500bn in three-month repo loans on Friday. The Fed is also making notable changes to the maturities of the Treasury securities it purchases monthly to increase reserves. Starting on Friday, the central bank will buy across a range of maturities to match the composition of Treasury securities outstanding, including coupons, bills, Treasury Inflation-Protected Securities and Floating Rate Notes.
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