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To: Freedom Fighter who wrote (212023)	1/2/2003 12:08:03 AM
From: GraceZ	Read Replies (2) \| Respond to of 436258

What do you make of the spike in Fed purchases of treasuries in the last 2 weeks (about 32 billion)? They were all short term RPs, there was only one coupon pass of 653 million in December. That 31 billion has already come back with only 2.5 outstanding until Jan 2. If they simply do nothing Jan 2 and 3 then RP float will be zero considering they haven't done a 28 day in over a month. Can't make loans on zero free float. They use RPs to keep interest rates on the target. They use coupon passes to add to the monetary base.