You must spread some Reputation around before giving it to r3volution 3.0 again.
https://www.ccn.com/the-fed-just-blew-the-lid-on-the-next-financial-crisis/
The Federal Reserve’s intervention in the financial system reached truly epic proportions Thursday after the central bank’s New York division announced the largest series of repo operations ever.
The announcement came mere days after the Federal Open Market Committee (FOMC) painted a rosy picture of the U.S. economy in its final policy meeting of 2019. But what the Fed says and what it does are two completely different things.
Central bankers are admitting – by their actions, not words – that crisis is brewing in the financial sector.
The New York Fed announced Thursday it’s planning to inject almost half a trillion dollars into the overnight repo market through the new year, significantly increasing intervention to ensure short-term interest rates are kept in check. The plan includes providing an additional $425 billion in short-term funding to banks in dire need of cash.
As the Financial Times reports, the nuts and bolts of the operations include $120 billion in overnight repo up to Dec. 30 and in early January, alongside $175 billion in longer-term operations.
But if the repo market is truly broken, as evidenced by the banking sector’s dependence on daily liquidity injections, there’s a good chance it’ll spill over to the rest of the economy.
Where in the economy will it spill over to first? That's what I'd like to know.
