Fed boosts plan to inject billions into the US economy

https://markets.businessinsider.com...ar-end-lending-rate-crisis-2019-12-1028762609

• The Federal Reserve Bank of New York boosted its repo operations Thursday, increasing planned capital injections as its key lending rate faces year-end pressures.
• The central bank lifted its limit for operations scheduled between December 31 and January 2 to $150 billion from $120 billion, according to a Thursday release.
• The expanded repurchase agreements arrive as banks look to prove liquidity in end-of-year evaluations. Lenders tend to rein in free cash ahead of the tests, and the activity could pull the overnight funding rate above its intended range for the second time this year.

The expanded operations arrive as the overnight lending rate faces heightened stress from banks' year-end activity. Legislation born from the financial crisis obliges lenders to hold a larger fraction of cash as emergency reserves. Year-end evaluations dictate how large a proportion banks must hold, leading firms to lend less cash as they look to prove liquidity to regulators.




Zoltan Pozasar, an analyst from Credit Suisse has told investors that in order to calm funding markets, the Fed will be forced to begin another round of quantitative easing “by year-end”.

The fact that quantitive easing is even being discussed during what some refer to as a “rocket ship of an economy” added with manufacturing in a recession, trillion dollar deficits, growth under 2%, the largest farm bailout in history, stagnate wages and zero plans to address any of it should be terrifying.

 

As the President said, the fed shouldn't be doing anything really. And Growth isn't quite under 2%(though it's not anywhere near as large as it should be.). The move from a service-sector economy to a producing economy once again is going to be an adjustment. It's especially an adjustment due to no infrastructure bill, in spite of the fact that both the far left and far right wanted an infrastructure bill.

We need a Congress that is ably competent in participating in the economy, without it, Trump can't do nearly as much to help the US Financial sector. There's only so many executive orders to be signed.

 

President Trump has been an abysmal failure on dealing with Spending and the National Debt.... just like every one of his predecessors for the last decade, except Newt Gingrich (Bill Clinton).

 

Already have last September QE 4 ..


Dont know where you guys was at.

 

That's because all spending originates in Congress. It doesn't matter WHO we put as President, so long as we don't fix Congress. A democratic president, a Republican president.

That's why I want to have a 10-year fixed budget, so that way the budget can stay in tact, without political promises and spending can be at least under control.

 

trump demanded the fed go to a negative interest rate, where are you getting he said “the fed shouldn't be doing anything really”?

 

So Trump couldn't veto the massive spending bill written by the Republican led Congress his first year?

 

the Trump economy is failing... they want to try to push it off until at least 2021

 

Is any of that your words?

 

The last two paragraphs, as required by the forum rules — I am not one of the fortunate ones that are allowed to get away with half assed or ideological charged (flame-baiting) thread creations — why?

 

He could have, chose not to. It's one of the weaknesses of the Trump Administration. I do wish Trump had more balls. That article about the #resistance in the West Wing would've infuriated me.

Imagine being a CEO where your workers defy the quota on a daily basis, couldn't be me.

 

The Federal Reserve has no choice but to intervene.

This past September, the overnight lending rate (that's the one that is directly set by the Fed.) spiked to 10% until the Fed. stepped in. Can you imagine Trump's reaction if the Fed. stood by and allow that rate to climb unchecked? It would crush the economy for however long it lasted.

 

This central bank 'intervention' is completely sick and WRONG in these times.

It was argued that it was absolutely necessary during the Great Recession of twelve years ago, but it sure as hell is not (NOT) needed now, and it actually goes against sound financial logic given the robust health of the economy now, and the 50-year low unemployment rate. This is totally insane and even though I'm a Right-winger, I blame Donald Trump for a lot of it because he's the one who has been pushing and shoving for crushed interest rates and for the Federal Reserve to continue to treat the economy like a cripple on "training wheels" -- like it was in 2008.

The other thing it does, though, (and this may be why Trump is pushing it before the next election) is that by crushing interest rates again, and stuffing the world full of more manufactured imaginary money (which just cheapens the value of YOUR American dollars), it keeps the almighty-god STOCK MARKET at record highs. It's an illusion, and it's a continuation of 'fraud-balloon' stimulus, and when the air starts coming out of this over-inflated gas bag, it's going to be UGLY.

 

100% correct
trump is trying to prop up the economy with massive debt and negative interest rates to secure his re-election

The long term consequences of this will be devastating

 

I'm not trying to play moderator, but there is a reason for the rule which requires us to indicate what words we are quoting and which are ours.

Now that I know that the last paragraph is yours, I can say that you are drawing an incorrect conclusion from the articles, rather than saying that the articles draw the wrong conclusion.

The issue is more a result of banking reserve requirements, quarterly tax payments, requirements to buy treasuries (all of which act to reduce available cash in the supply) and the increased reliance on overnight borrowing by hedge funds.

Economic factors, such as the manufacturing slump, aren't a part of the problem.

 

Holy crap, Obama's economic plan coming back in vogue despite the fact that it never fixed anything other than making wall street and wall street bankers a **** ton of money?

 

trump does seem to emulate him in many ways, strange seeing that he was such a failure for not bailing out the recession that was left to him by the previous republican administration.

It’s impressive we made it 15 posts before someone whined ...b...b...but obama!
New con record!

 

You're not talking to Trump, you're talking to AmericanNationalist

 

Thank you for that insightful commentary!

I thought I was taking to trump for a minute, without your post I would have never known!

 

You just questioned a policy that you loved under Obama, but dismiss now.
I disagreed with it both times, so there's that.

 

Obviously

 

Please direct quote me where I loved any policy under the Obama administration or retract your lie.

 

Over leverage and lack of collateral are

 

They have been injecting billions for the past couple of years keeping the stock market inflated.It's no longer a reflection of profits as it once was.We need to go back to the pre Reagan era when it was ILLEGAL FOR COMPANIES TO BUY BACK THEIR OWN STOCK TO INFLATE IT"S VALUE.

 

WTF do you think happened in under the entire Obama admin?

We are as broken as 2007-8, but now with much richer bankers thanks to team O