The Federal Reserve has moved with unprecedented force and speed to pump huge amounts of cash into the financial system to ease disruptions that have escalated since the viral outbreak. The New York Federal Reserve Bank said it will offer $1 trillion of overnight loans a day through the end of this month to large banks.
H/T: PBS NewsHour
“The Fed has just worked with unprecedented speed,” Steven Friedman, a former economist at the New York Fed, told the AP. “I think there will be no hesitation on their part about buying as many Treasuries and mortgage-backed securities as necessary.”
Anyone wishing to (better) understand the 'dislocation' in the US Treasury market contributing to the market meltdown - including the Fed's massive injection of liquidity into the 'repo market' - should read this: https://t.co/ajUPE2NaeF— Alph'alpha (@ApproTrade) March 21, 2020
$ illiquidity in foreign markets is serious problem. & since IMF/WB have only about $1 trillion to lend 2 EM, the Fed will need to be again the de-facto ILOLR, with swaps and/or repos— Nouriel Roubini (@Nouriel) March 20, 2020
This Is the One Thing That Might Save the World From Financial Collapse https://t.co/RTxoSlo5tP
The Fed's balance sheet in 2008 was $800-billion.— Peter Schmidt (The 92ers) (@The92ers) March 21, 2020
Now the Fed needs to conjure into existence $1-trillion to keep the repo market from collapsing. The problems are obviously getting much bigger and the source of these problems, the Fed, is given more power! #FederalReserve pic.twitter.com/ezcc2EjGy9