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Fed Adds Just Over $90 Billion in Temporary Money to Markets Intervention comes as overnight repo totaling $58.6 billion and 14-day repo totaling $32.2 billion


The Federal Reserve building in Washington. 

The Federal Reserve added $90.8 billion in short-term money to financial markets Tuesday.

The Fed added money in two repurchase-agreement operations, or repos. The overnight intervention added $58.6 billion, while a 14-day repo added $32.2 billion. In both cases, eligible banks—called primary dealers—took less money than the Fed was willing to offer.


Fed repo interventions take in U.S. Treasurys, agency and mortgage bonds from eligible banks in what is effectively a short-term loan of central-bank cash, collateralized by the securities. The banks tapping this cash are limited in the amount of liquidity they can take in exchange for their securities, and they pay interest to the central bank to get the funds.


Fed money-market interventions are aimed at keeping the federal-funds rate within the 1.5%-to-1.75% range, and to limit the volatility of other money-market rates. The Fed restarted its repo operations in September after unexpected market volatility and steadily increased the sizes of its operations. Demand for Fed money has waxed and waned, and by and large the Fed has restored calm to markets.

The Fed said this past Thursday that its balance sheet stood at $4.18 trillion as of Wednesday, versus $3.8 trillion in September. Peak Fed holdings were $4.5 trillion. About $229.5 billion in repo interventions were also outstanding on Wednesday, versus $210.6 billion on Jan. 9.

The Fed had originally planned to wind down repo operations at the end of this month but will keep them going until at least mid-February. Many analysts expect them to go on for even longer.