Friday, 13 December 2019

Fed to inject $500 BILLION into Repo Market





If True, This Will Increase The Fed’s Balance Sheet Beyond Its All-Time High Of $4.5 Trillion.

12 December, 2019

The New York Federal Reserve Bank has announced that it will be dumping a previously unfathomable amount of money into the liquidity market beginning Friday.

The Fed’s statement reads:

In accordance with the most recent [Federal Open Market Committee] directive, the Desk will conduct repo operations to ensure that the supply of reserves remains ample and to mitigate the risk of money market pressures around year end that could adversely affect policy implementation.

The Desk will continue to offer two-week term repo operations twice per week, four of which span year end. In addition, the Desk will also offer another longer-maturity term repo operation that spans year end. The amount offered in this operation will be at least $50 billion.

Overnight repo operations will continue to be held each day. On December 31, 2019 and January 2, 2020, the overnight repo offering will increase to at least $150 billion. In addition, on December 30, 2019, the Desk will offer a $75 billion repo that settles on December 31, 2019 and matures on January 2, 2020.

The Desk intends to adjust the timing and amounts of repo operations as needed to mitigate the risk of money market pressures that could adversely affect policy implementation, consistent with the directive from the FOMC.”

Translation: The New York Fed will continue to offer two-week term repurchase operations twice per week. Four of those will span the end of the year. It will also offer one more longer-term “repo” operation that also spans the end of the year. That operation will be at least $50 billion.

Also, in order to prevent an avalanche of liquidity issues to end the year, the Fed will continue its daily repo operations through the end of the year. The amount that will be offered each night will be increased to $150 billion. Additionally, there will be a $50 billion term repo, followed by daily $35 billion repo offerings, which will total $365 billion.

Adding in $50 billion for the expanded overnight repo, and another $60 billion in T-bill purchases, the total injection in the next 30 days will be $500 billion. Added to the current Fed balance sheet, by mid-January, it will hold more than its all-time high of $4.5 trillion.

(Photo Credit: Jericho/Wikimedia Commons)

See also - 

Six of eight bodies recovered from White Island

Retrieval operation 

successfully recovers six 

bodies from White Island

This aerial photo shows White Island after its volcanic eruption in New Zealand Monday, Dec. 9, 2019

13 December, 2019

Police announced just before 11.00am that six of the eight bodies were being prepared to be airlifted off the island.
The bodies lay around 300 metres from the crater, within 200 square metres, in small clusters.
Police had foreshadowed their inability to locate all eight bodies believed to be on the island, with surveillance only identifying six bodies among the debris and ash.

They said they would only look for the remaining two if they had time and believed it safe to do so.
The high-risk rescue occurred despite raised seismic activity in the wake of Monday's blast - GNS Science has reported a 50 to 60 per cent chance of a further eruption.
Deputy police commissioner Mike Clement said conditions mimicked the still morning at nearby Whakatāne, 50km from the volcano.
"The volcano is behaving, the sea state is manageable in terms of getting people on and off the island, all of those things are within our favour," he said of the recovery operation.
Clement paid tribute to the fortitude of those conducting the mission.
"Everybody has a rich appreciation of the absolute bravery of everyone involved, particularly those going onto the island," he said

"They will say 'it's their job' but the reality is we need people like that to do their job to get beyond moments like this."
Currently 17 survivors are being cared for at four hospitals around New Zealand – Middlemore, Hutt Valley, Waikato, and Christchurch. 
Thirteen of these patients are critical.
So far 11 patients have been transferred to Australia and are being treated in hospital.