The Fed says it will continue overnight repos of at least $75 billion through November 4

Bollards help secure the entrance to the Federal Reserve in Washington, Dec. 16, 2015.

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Bollards help secure the entrance to the Federal Reserve in Washington, Dec. 16, 2015.
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Reuters/Kevin Lamarque

  • The Federal Reserve announced Friday that it will extend overnight repos of at least $75 billion through November 4.
  • The bank’s previous plans to calm rates in money markets only extended through Oct. 10.
  • Since short-term rates shot up as high as 10% in September, the Fed has injected hundreds of billions of dollars into money markets.
  • Read more on Business Insider.

The Federal Reserve will continue its practice of injecting money into financial markets through November 4 to help keep the federal funds rate within the bank’s target.

The New York Fed said Friday that it will continue to offer daily overnight repurchase agreement operations between October 7 and November 4 with a maximum limit of at least $75 billion. The previous plan to conduct the repos only extended through October 10.

The Friday announcement also included eight term operations that will take place between October 8 and October 29. The first three have limits of at least $45 billion, and the rest have limits of at least $35 billion. After November, it has yet to be determined if the Fed will continue the practice

“The operation schedules are subject to change if market conditions warrant or should the FOMC alter its guidance to the Desk,” the Fed wrote in a statement.

The announcement comes after a number of efforts to stabilize money markets and contain interest rates that began in September. Since then, the Fed has pumped hundreds of billions of dollars into markets to bring interest rates back within the central bank’s intended range.

In early September, short-term rates shot up as high as 10%. That’s four times as much as usual levels, a move that could disrupt the bond market and lending system if left unchecked.

There’s even been discussions that the Fed is considering a permanent solution to calm the storm in money markets. In an interview with the New York Times last month, New York Fed President John Williams said the bank could consider establishing an ongoing facility for repos.

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