Overnight repos - so what is it: MB is saying this is money that heads into the economy and likely stocks; AR says they are mainly temporary but not only. How do we know? Who is right? I mean, one of you two must know the truth and the other one not, no? <g>
The Fed's funds are now trading at 5 3/8, a full 5/8 above their target (target? in the news it's simply the Fed rate - it's official!) of 4 3/4. Imagine the outcry if this became official - "the Fed just raised rates by 5/8, virtually erasing the three dramatic cuts in the fall that saved the world from financial melt-down." "Sorry folks, we've been meaning to tell you, but we've been busy debating whether to announce if we're going to tell you that we're thinking of maybe someday - I mean, just sort of chatting about it - about tightening the bias. In the mean time, we've let rates go up so we won't have to decide anything - it's not our fault. We never raised rates and we don't intend to but frankly, we can't keep them down."
Kailash
Thursday April 1, 9:50 am Eastern Time
Fed adds reserves via 4-day fixed, O/N system RPs
NEW YORK, April 1 (Reuters) - The Federal Reserve added temporary reserves to the banking system on Thursday via four-day fixed and overnight system repurchase agreements, the New York Fed confirmed.
The operations were expected.
Federal funds were trading at 5-3/8 percent, well above the central bank's 4-3/4 percent target for the rate, at the time of the operation.
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