Federal Reserve to buy $60 billion treasury bills every month

Federal Reserve to buy $60 billion treasury bills every month

The Fed also said it would continue to inject cash into overnight lending markets until January by offering daily operations in the market for repurchase agreements, or repos.

The Treasury purchases will therefore have "little if any" meaningful effect "on household and business spending decisions and the overall level of economic activity", the Fed said, repeating that explanation three times for emphasis in a statement Friday accompanying its announcement.

Overnight repo operations will occur daily, initially at an offering amount of at least $75B per operation. The Committee will continue to monitor money market developments as it assesses the level of reserves most consistent with efficient and effective policy implementation. "It is meant to ensure in an ample reserves regime that we are able to set the fed funds rate in the target range that we set".

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The 10-year Treasury falls, pushing yield up nearly 7 basis points to 1.74%; (TLT -1.3%), (TBT +2.6%). -China trade deal could be a "positive development" for the US economy, Dallas Federal Reserve Bank President Robert Kaplan said on Friday but repeated that he'll remain open-minded and watching data closely in the run-up to the Fed's October 29-30 policy meeting.

On Thursday, the 10th of October 2019, the US Federal Reserve had unleashed a package of fiscal rules, first introduced during the era of great financial depression of 2007-2009, in a bid to ease capital and liquidity requirements of the local and foreign lenders.

"The dramatic increase in Treasury issuance takes liquidity out of the system", Kaplan said at the Commonwealth Club.

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