What it means when the Fed conducts a 'repo' operation

The Federal Reserve has been buying bonds in an effort to make sure there’s enough liquidity in the system. The last time the Fed conducted a similar repurchasing operation was during the financial crisis. Here’s what it means when the Fed conducts a ‘repo’ operation.
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With the Federal Reserve looks set to cut its benchmark interest rate by another quarter percent, markets are trying to figure out where the U.S. central bank is headed. It’s been ratcheting up rates for three years. This year it reversed course. While Chairman Jerome Powell called it a “midcycle adjustment,” there’s something happening in an obscure, but critical corner of the financial market, which could mean more rate cuts ahead. CGTN’s Toni Waterman explains from Washington.
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13 thoughts on “What it means when the Fed conducts a 'repo' operation”

  1. The length of the repo operation suggests all is not well with the banking system. Liquidity issue suggests we are on the brink of GFC mark 2…….batten down the hatches and prepare for the recession

  2. Not enough money coming into your bank, with employees/shareholders/institutional investors, to pay etc? Who owe the bank the most money? Corporations at 12 Trillion Dollars. Even when the rates are so low, those corporations are technically insolvent. Will the banks foreclose on them? NO THEY WON'T.

  3. Unlike a Regular Repo where the bank strips you of your house and car and throws you out on your behind,
    in a FED Rep, it give $120 billion a day to failing banks and kisses their behind.

  4. If these were really overnight repos, the cash would be returned the next day as they're reversed. However, we're hearing of an accumulating amount on the order of hundreds of billions of dollars (can you report the total?). I suspect the Fed is confronting a significant amount of rehypothecation that likely triggered this in the first place. Also, today the Fed extended the repo operation to 11/4/19 instead of next week on 10/10/19 as originally planned.

  5. I still don't understand how we as homogeneous group of people could pay back the debt, if the Fed has no other alternative than to lower rate, can someone please explain that to me?
    As in old saying, No human individual in debt is free.

    We the own the system not the other way around the system owns us, correct right?

    1. we are in for the biggest scam in history

    Or

    2. We are participating in sadistic process that will continue enslave human in the future to a system

  6. This is very informative and reminds me of Michelle Caruso Cabrera who was one of the few CNBC people who took the time to explain things.

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