News for hackers. Stuff that matters.

A comment on New York Fed Adds $115.14B in Short-Term Liquidity to Markets. Parent comment

Re:New York Fed Adds $115.14B in Short-Term Liquidity to Mar... by undersuit on Thursday November 07, 2019 @06:37PM (#21478575)
> Don’t be outraged that the fed is trying to maintain a stable economy.

The explanation for the FEDs doing the lending is it will spike short term rates or something. Why can't we be mad that the Fed is willing to do this? Like what if I'm one of the institutions waiting on the sidelines to make some money off of short term lending and the Fed keeps tamping down on what could be a source of profit?

[ Parent | on HN ]
Re:New York Fed Adds $115.14B in Short-Term Liquidity to Mar... by bransonf on Thursday November 07, 2019 @06:43PM (#21478630)
> Like what if I'm one of the institutions waiting on the sidelines to make some money off of short term lending and the Fed keeps tamping down on what could be a source of profit?

That's the problem. If you are one of these institutions, you're setting your interest rate much higher than is healthy for the repo market.

[ Parent | on HN ]
Re:New York Fed Adds $115.14B in Short-Term Liquidity to Mar... by internet_user on Thursday November 07, 2019 @06:52PM (#21478706)
..but the omniscient Fed knows better than the market?

Is that what you are saying?

[ Parent | on HN ]
Re:New York Fed Adds $115.14B in Short-Term Liquidity to Mar... by bransonf on Thursday November 07, 2019 @07:03PM (#21478787)
Well, they're part of the market.

They have their judgments just like every other entity in the market. They use their best judgement to know that the repo market needs a cash injection.

They're not infallible, but as regulators... their job is to regulate.

[ Parent | on HN ]
Re:New York Fed Adds $115.14B in Short-Term Liquidity to Mar... by SCAQTony on Friday November 08, 2019 @06:17PM (#21487940)
Nonetheless, $200-billion has been added to the money supply. (See FRED M2 Index link below from September 19 to the present)

$200-billion could have been implemented for more worthy projects than the repo market. In my opinion, the FED needs more oversight from Congress and/or the Treasury.

https://fred.stlouisfed.org/series/M2

[ Parent | on HN ]