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Fed’s Williams says central bank would adjust plan to soothe funding markets ‘as appropriate’

“New York Fed President John Williams said Thursday that the central bank was closely monitoring its measures to soothe pressures in funding markets, and could adjust its plans” writes Sunny Oh for marketwatch.com. Williams said the central bank could still tweak “technical details,” suggesting this could include buying short-dated coupon-bearing securities later.Investors and analysts have raised worries that the U.S. central bank will struggle to source sufficient bills from banks and investors.The repo market is where hedge funds and banks lend funds in return for collateral such as Treasurys or government-sponsored mortgage bonds.The surge in repo rates briefly tugged the central bank’s benchmark interest rate above its preferred range, raising questions as to whether the Fed was losing its grip on monetary policy.
 
Source: marketwatch.com



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