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To: pater tenebrarum who wrote (83773)	1/20/2000 10:40:00 AM
From: Ken98	Read Replies (2) of 86076

<<FED OPERATION: Add via overnight system; funds 5 7/16% By Bridge News New York--Jan 20--The Federal Reserve added reserves with overnight system repurchase transactions at around 0930 ET. The repos were conducted for triparty settlement. Fed funds were last at 5 7/16%.>> <<FED CALL: Overnight repos likely despite on-target funds rate By Michael S. Derby, Bridge News New York--Jan 20--Even though fed funds opened on-target Thursday morning, the Federal Reserve likely will intervene with overnight system repurchase agreements to address a technical need for reserves, analysts said. * * * Funds were last at 5.50%. Bank reserves are still seeing pressure from the high but declining circulating currency levels, along with elevated Treasury deposits at the Fed tied to the recent tax date, analysts said. The Fed also has a modest $5 billion in long term repos implemented late last year rolling off, as well. The Fed "had some more of the old repo running off today, so I'm guessing that they'll do at least an overnight if not a longer operation" to supplement the expiring repos, said Carol Stone, deputy chief economist for Nomura Securities. Given the nature of the repos rolling off Thursday, Stone and other analysts said it's also possible the Fed could opt for a longer term repo to address what's appears to be a growing add need going forward. On Wednesday, the Fed refrained from open market intervention, after coming in with $8.985 billion in overnights Tuesday. For Wednesday, fed funds averaged 5.47% and traded between 5.00% and 5.625%. End>> What's your take on the next Fed meeting? 1/4 point followed by mushy language under the "new" bias statement and then followed with around $10B+ coupon passes in the day or two after the meeting?

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