Why is the Fed pumping money into the banking system?

//Why is the Fed pumping money into the banking system?

The US central bank has pumped more than $200bn (£160bn) into the financial system this week – the first time there’s been such an intervention since 2008. The Federal Reserve’s aim was to stabilise what is usually a calm part of the market. Interest rates in the so-called “repo market” had shot up to 10% in some cases – although the cost of borrowing in that market more typically hovers around the benchmark rate set by the Fed – around 2%. So what happened and should we worry? First things first: what’s the repo market? Banks, hedge funds and other players borrow money regularly on a short-term basis to ensure … (full story)

2019-09-20T11:51:51+00:00