From the sorcery. More and more and more Fed funny money! For the banks, not you.
The New York Federal Reserve Bank said Friday it will continue to inject billions into the US financial plumbing on a daily basis through November 4, extending the operations by three weeks.
The effort, begun in mid-September, is aimed at preventing a spike in short-term interest rates, the New York Fed said in a statement.
Rates spiked last month as banks struggled to find the cash needed to meet reserve requirements, prompting the Fed to pump billions into US money markets.
It announced daily operations which were due to end October 10, but even then demand exceeded supply on some days.
In Friday’s announcement, the New York Fed said it will continue to offer up to $75 billion a day in repurchase agreements — exchanging secure assets for cash for very short periods — as well as 14-day “repo” operations twice a week of at least $35 billion each.
Economists say an array of conditions converged to dry up liquidity in the banking system — including quarterly corporate tax payments and a surge in government debt sold to investors, which drained cash out of banks.
Like I said the other week: The dog ate my liquidity, Mrs. Wall Street!
Seriously, this is serious. My calculator’s “zero” button broke. What are they shooting for? $3 Trillion? $4 Tr? 5??? The Moon? And, does this possibly have an end? Other than the inevitable, I mean.
Might have a TPC column lining up here.