DJIA Down Over 9%
March 12th, 2020Flashback: “We Simply Use the Computer to Mark Up the Size of the Account.”
For those who might be wondering, “Where did the Federal Reserve get the $1.5 trillion they just committed to injecting?” A blast from the past explanation of how it all works. ????? pic.twitter.com/Bw4N12EFoq
— Ben Rickert (@Ben__Rickert) March 12, 2020
Update: Fed Announces $500 Billion Repo Operation
“Balm for your affliction, child.”
-Father Grigory, Half Life 2
*chortle*
Via: Yahoo Finance:
The New York Fed announced Thursday it will be offering $500 billion in a three-month repurchase operation (repo) at 1:30 p.m. ET, offering immediate relief to tightening financial markets. It will further offer $500 billion in a three-month repo operations and $500 billion in a one-month repo operation for same day settlement tomorrow.
The move marks a major infusion of liquidity from the Fed. Yesterday, the NY Fed announced its would be offering $175 billion in overnight and $45 billion in two-week term repos.
The Fed said it will conduct purchases across a “range of maturities to roughly match the maturity composition of Treasury securities outstanding,” as part of its $60 billion reserve management purchases starting tomorrow through April 13.
Stocks immediately pared losses following the announcement. The Dow recovered more than 1,000 points, after earlier being down more than 2,000 points.
“These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak,” the New York Fed said in a statement. “Reserve management purchases into the second quarter will continue to be conducted with this maturity allocation. The terms of operations will be adjusted as needed to foster smooth Treasury market functioning and efficient and effective policy implementation.”
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Wrecked.
