Fed to Inject $1.5 Trillion in Bid to Prevent ‘Unusual Disruptions’ in Markets

[Theodarzna]

The Federal Reserve said it would inject more than $1.5 trillion of temporary liquidity into Wall Street on Thursday and Friday to prevent ominous trading conditions from creating a sharper economic contraction.

"These changes are being made to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak," the New York Fed said in a statement on Thursday

The Fed said it had made the changes for short-term funding markets following instructions from Chairman Jerome Powell, who was in consultation with the rate-setting Federal Open Market Committee.

The Fed took initial steps earlier this week to boost the volume of lending for overnight repurchase agreement operations, or repo. It had announced plans Wednesday to increase lending to more than $500 billion, from less than $200 billion, before announcing the additional expansion on Thursday.

The New York Fed said it would conduct three additional repo offerings worth an additional $1.5 trillion this week, with two separate $500 billion offerings that will last for three months and a third that will mature in one month.

If the transactions are fully subscribed, they would swell the central bank's $4.2 trillion asset portfolio by more than 35%.

A deepening rout on Wall Street has fueled strains on financial-market plumbing, putting pressure on the central bank to intervene in a way not seen since the 2008 financial crisis.

"Financial markets are not functioning well, and the liquidity situation is evolving into something that necessitates a broader and stronger response by the Federal Reserve," said Brian Sack, who ran the New York Fed's markets desk from 2009 to 2012 and is now the director of economics at hedge-fund manager D.E. Shaw group.

The moves suggest the Fed is shifting toward implementing the type of long-term asset purchases it deployed during and after the 2008 financial crisis, first to restore market functioning and later to spur a faster recovery in employment and output.

The Fed has been buying $60 billion a month in Treasury bills after concluding last fall that bank deposits held at the Fed, known as reserves, had dropped to uncomfortably low levels. On Thursday, the central bank said it would no longer focus solely on purchasing short-term bills, but would instead buy securities across the range of maturities issued by the Treasury Department. Those changes take effect on Friday.

(source)

You know, I think the most amazing thing is that in like a couple of days they managed to summon the exact amount of money that would say clear all Student Loan Debt to prevent "Unusual Disruptions" do to what we keep being told is a slightly more bad flu. But I guess we couldn't magically create that money for other purposes at all. Weird huh?

[Doctor Amadeus]

Yeah this is called Welfare, I was raised on it, so yeah, but I have no problem with it, I work I am taxed, I do NOT want others to suffer needlessly because of a temporary of possibly permanent impairment.

[Dug]

2008 showed us that money can ALWAYS be pulled out of the federal governments ass to save their rich donors interests.

[Themius]

2008 showed us that money can ALWAYS be pulled out of the federal governments ass to save their rich donors interests.

Yeah, can't save students in debt though... I mean if the students weren't in debt that 1.5 trillion would finds its way back into the economy unlike when rich people just... hoard the money.

Injecting 1.5 trillion into citizens would ultimately end up with people saving and buying that would likely overall be more beneficial to small local businesses especially.

[nonameelf]

You know what would be super helpful for pandemics like this? Universal healthcare and paid sick leave.

Oh, wait, that's SoCiAlIsM and we can't do that. Better to just have the government give $1.5 trillion to businesses.

[Zan15]

(source)

You know, I think the most amazing thing is that in like a couple of days they managed to summon the exact amount of money that would say clear all Student Loan Debt to prevent "Unusual Disruptions" do to what we keep being told is a slightly more bad flu. But I guess we couldn't magically create that money for other purposes at all. Weird huh?

well...there is a lot wrong here.


A- no slighty more bad flu, so grow up.

B- the money is not being magically created. Read up on how the fed works.

C- the money is being invested, 97% of it in loans that range from overnight repayments, daily, weekly, months repayments. None of it is a direct giveaway.

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You know what would be super helpful for pandemics like this? Universal healthcare and paid sick leave.

Oh, wait, that's SoCiAlIsM and we can't do that. Better to just have the government give $1.5 trillion to businesses.

they are not "giving" money to anyone. its all debt issuance and treasury purchases. all which in theory will return more than is spent.

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Yeah, can't save students in debt though... I mean if the students weren't in debt that 1.5 trillion would finds its way back into the economy unlike when rich people just... hoard the money.

Injecting 1.5 trillion into citizens would ultimately end up with people saving and buying that would likely overall be more beneficial to small local businesses especially.

Won't fix the current problem. Consumers have the money to spent, it will become more of an issue of their ability to spend the money.

[Themius]

well...there is a lot wrong here.


A- no slighty more bad flu, so grow up.

B- the money is not being magically created. Read up on how the fed works.

C- the money is being invested, 97% of it in loans that range from overnight repayments, daily, weekly, months repayments. None of it is a direct giveaway.

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they are not "giving" money to anyone. its all debt issuance and treasury purchases. all which in theory will return more than is spent.

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Won't fix the current problem. Consumers have the money to spent, it will become more of an issue of their ability to spend the money.

Consumers won't have the money to spend when they aren't working... .exactly what is the plan here? Have consumers have access to easy debt?

A lot of shopping and small businesses operate online nowadays, they could survive if they still have customers that have money.

[Sorshen]

Oh look, socialism does work sometimes... but only for some

[Zan15]

Consumers won't have the money to spend when they aren't working... .exactly what is the plan here? Have consumers have access to easy debt?

A lot of shopping and small businesses operate online nowadays, they could survive if they still have customers that have money.

and how are they going to get the goods to sell?
How are they going to get the goods to the people?
You think, oh delivery folks won't panic either?

people won't want to get shit delivered out of fear, look what its done to Chinese food delivery...and food delivery in general. its waaaaaay down in a lot of markets according to reports from analysist who follow things like door dash and uber.

[breadisfunny]

yes i called it. BAILOUT TIME FOR THE RICH PEOPLE! WOOT WOOT! all the while poor people get left to die and fall into financial ruin.

[Zan15]

That is exactly what they are doing. They are printing (or "digitally creating") money to give to bankers who will roll it over and keep it.
Your money is being stolen.
The government can't reach into your wallet and take your money without some resistance, but it can do this which amounts to the same thing.
The bankers benefit, everyone else wonders why their money can't buy so much. The government blames immigrants or something.
Your money is being stolen.

(at this point will come in and unhelpfully muddle the issue for the benefit of the government and financiers by using a lot of financial jargon. They are either clueless or lying to you.)

Remember,

Your money is being stolen.

You really don't know bumpkis about how the fed is funded or run do you?
You should google it so you stop embarrassing yourself with crazy conspiracies and misinformation


do you even know that each year the Fed returns excess "profit" on its actions to the treasury to the tune of 50-120 billion dollars a year.

They use zero tax payer money, and yet they give money back to taxpayers/govt.

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Where does the Fed get its money?

The Federal Reserve makes money—lots of it. The Fed had over $4.5 trillion in assets, as of March 12, 2015. The majority of revenue comes from open market operations—specifically the interest on the Fed's portfolio of Treasury securities as well as the money that comes from the buying/selling of the securities and their derivatives.
Other Fed revenue come from sales of financial services like check and electronic payment processing and discount loans to banks. There's also interest on foreign deposits within the Federal Banking system.

However, the Fed doesn't really keep the money. The government receives all of the system's annual profits—after certain expenses. In 2014, the Fed sent $98.7 billion of its $101.5 billion total net income in 2014 to the U.S. Treasury.

[Bryntrollian]

That is exactly what they are doing. They are printing (or "digitally creating") money to give to bankers who will roll it over and keep it.

Your money is being stolen.

The government can't reach into your wallet and take your money without some resistance, but it can do this which amounts to the same thing.

The bankers benefit, everyone else wonders why their money can't buy so much. The government blames immigrants or something.

Your money is being stolen.


(at this point will come in and unhelpfully muddle the issue for the benefit of the government and financiers by using a lot of financial jargon. They are either clueless or lying to you.)

Remember,

Your money is being stolen.

The money isn't being created or " printed " for this, it's money that the Federal Reserve already has on hand...

[Zan15]

The money isn't being created or " printed " for this, it's money that the Federal Reserve already has on hand...

just realized it was a burner account being a burner account.

and money it had on hand from revenue sources not tax payer related....or even govt related.

how can he hate something that makes taxpayers money but does not cost them a dime when it loses money

[Paranoid Android]

FML. What more do I need to say.

Trumpkins, I'm sure you will hate this type of socialism. Didn't you criticize Obama for this? Trump sure fast to help the elite. You were so conned.

[Beefhammer]

And the conservatives praise this welfare, but shit on those that actually need a little but of help because a relative insignificant amount of people cheat the system. Who cares that corporations cheat the system daily, let's throw buckets of cash at them. Anyone saying this is good or needed and is against all forms of assistance to poor people are full of shit.

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FML. What more do I need to say.

Trumpkins, I'm sure you will hate this type of socialism. Didn't you criticize Obama for this? Trump sure fast to help the elite. You were so conned.

Obama got criticized but wasn't it Bush that did the bailouts and stimulus?

[Edge-]

And the conservatives praise this welfare, but shit on those that actually need a little but of help because a relative insignificant amount of people cheat the system. Who cares that corporations cheat the system daily, let's throw buckets of cash at them. Anyone saying this is good or needed and is against all forms of assistance to poor people are full of shit.

"The markets and companies are the drivers of this economy!"

Meanwhile, consumer spending actually drives 70% of our economy.

Conservatives/Republicans obsession with the completely farcical and thoroughly debunked supply-side economic theories have ruined state economies and they refuse to learn from their mistakes.

[Beefhammer]

You really don't know bumpkis about how the fed is funded or run do you?
You should google it so you stop embarrassing yourself with crazy conspiracies and misinformation


do you even know that each year the Fed returns excess "profit" on its actions to the treasury to the tune of 50-120 billion dollars a year.

They use zero tax payer money, and yet they give money back to taxpayers/govt.

- - - Updated - - -

Where does the Fed get its money?

The Federal Reserve makes money—lots of it. The Fed had over $4.5 trillion in assets, as of March 12, 2015. The majority of revenue comes from open market operations—specifically the interest on the Fed's portfolio of Treasury securities as well as the money that comes from the buying/selling of the securities and their derivatives.
Other Fed revenue come from sales of financial services like check and electronic payment processing and discount loans to banks. There's also interest on foreign deposits within the Federal Banking system.

However, the Fed doesn't really keep the money. The government receives all of the system's annual profits—after certain expenses. In 2014, the Fed sent $98.7 billion of its $101.5 billion total net income in 2014 to the U.S. Treasury.

Account created today. Probably some shitposter who was recently banned.

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You know what would be super helpful for pandemics like this? Universal healthcare and paid sick leave.

Oh, wait, that's SoCiAlIsM and we can't do that. Better to just have the government give $1.5 trillion to businesses.

Or you know, allowing people to get tested that aren't showing signs of a fully blown COVID--19 case. China and SK have been testing 10s of thousands per day, we have barely tested a thousand people. Not to mention the rash of idiot "macho men" who think just because they are young and healthy means they can still do whatever they want. Had a father go to his daddy daughter dance instead of staying home. He probably passed it on to many other. It will find it's way to someone weak enough that it can kill. But hey, why let this stop my plans.

[Paranoid Android]

Obama got criticized but wasn't it Bush that did the bailouts and stimulus?

Yes. My snark was not clear enough so my fault.

If you ask right winger, who especially watches Fox, they have Obama giving all the bailouts.

[transipithal]

You really don't know bumpkis about how the fed is funded or run do you?
You should google it so you stop embarrassing yourself with crazy conspiracies and misinformation


snip long smokescreen of jargon from dick-sucking corporatist

I refer you to my comment above:

(at this point will come in and unhelpfully muddle the issue for the benefit of the government and financiers by using a lot of financial jargon. They are either clueless or lying to you)

I repeat: your money is being stolen.

[transipithal]

You really don't know bumpkis about how the fed is funded or run do you?
You should google it so you stop embarrassing yourself with crazy conspiracies and misinformation


<snip long smokescreen of jargon from dick-sucking corporatist>

I refer you to my comment above:

(at this point will come in and unhelpfully muddle the issue for the benefit of the government and financiers by using a lot of financial jargon. They are either clueless or lying to you)

I repeat: your money is being stolen.

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The money isn't being created or " printed " for this, it's money that the Federal Reserve already has on hand...

Simple question: The US is $23 trillion dollars in debt. If the Federal Reserve has money on hand, why is it not being used to pay down debt?

You don't know, do you?