New York Fed to Add More Liquidity Into Short-Term Markets Unsettled By Coronavirus

New York Federal Reserve Bank

The New York Fed has just announced that it will increase its lending in short-term funding markets that have been unsettled as investors fear the worst about the coronavirus.

In a statement, the bank said it would increase its daily overnight repo operations to at least $175 billion for the next month. That's up from $150 billion announced on Monday. In addition, the bank will offer a one-month term repo operation of at least $50 billion. This will be offered three times over the next month, with the first operation on Thursday. The bank kept the size of its two-week repo operations steady at $45 billion. These are offered twice per week.

This is technical stuff but it is serious money pumping.

On the other side of the COVID-19 panic, there will be a serious acceleration in price inflation.

-RW