Fed focuses on repo market exit strategy after avoiding year-end crunch

NEW YORK: Wall Street's worst fears of a year-end funding squeeze never materialized thanks in large part to the quarter-trillion dollars the Federal Reserve stuffed into the market to ensure nothing became gummed up.

The Fed will continue pumping tens of billions a day into the repo market through at least the end of January. Its ability to exit from the repo market after that time will depend on how long it takes the central bank to make the balance sheet large enough so there are adequate reserves in the banking system - and the repo operations are no longer needed.

"There are people at the Fed who have a preference for the smallest possible balance sheet, and we just don't know how much their views have evolved," said Lou Crandall, chief economist at Wrightson ICAP, a research firm. Richmond Fed President Thomas Barkin said on Friday that in addition to a standing repo facility, long-term fixes for providing more liquidity in money markets could include adjusting liquidity regulations and setting restrictions on other programs that can affect reserves, such as the foreign repo pool.

ประเทศไทย ข่าวล่าสุด, ประเทศไทย หัวข้อข่าว

Similar News:คุณยังสามารถอ่านข่าวที่คล้ายกันนี้ซึ่งเรารวบรวมจากแหล่งข่าวอื่น ๆ ได้

First three weeks of the year can be an emerging-market red herring“This year, the MSCI Emerging Markets Index entered bull market after it crossed key technical thresholds in the middle of last month, buoyed by the prospect of a preliminary trade deal between the US and China.”
แหล่ง: BusinessTimes - 🏆 15. / 51 อ่านเพิ่มเติม »