Fed May Be Quietly Masking Extent of Efforts to Calm Repo Market

Fed May Be Quietly Masking Extent of Efforts to Calm Repo Market

By Alex Harris
December 23, 2019, Bloomberg

Wall Street sleuths are wondering whether the Federal Reserve is quietly doing more to calm the U.S. repo market than just the headline-grabbing liquidity injections that have captivated observers for months.

The New York Fed runs something called the foreign reverse repo pool, a place where other nations’ central banks can park cash. The amount outstanding has shrunk by 18% since peaking at $306 billion in mid-September.

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