Repo’s Through April

The Federal Open Market Committee announced at 1 PM Central Time that they have kept the Federal Funds Rate the same at 1-1/2to 1-3/4 (below the market rate) and extended their Repo operations through April.[1]

Repo purchases,[2] after they were initially started without warning on Sept 17, were originally only supposed to go through Oct, then Nov, and as of yesterday, through the end of January.[3]

The Fed keeps interest rates low by printing money.[4]

“The United States can pay any debt it has because we can always print money to do that. So there is zero probability of default.“ -Former Federal Reserve Chairman Alan Greenspan, Meet the Press, August 7, 2011.

They’re printing money.

[1] https://www.federalreserve.gov/monetarypolicy/files/monetary20200129a1.pdf

[2] https://www.hamiltonmobley.com/blog/risky-debt

[3] https://www.hamiltonmobley.com/blog/not-qe?rq=Not%20qe

[4] https://fred.stlouisfed.org/series/fedfunds “The effective federal funds rate is essentially determined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target. […] Similarly, the Federal Reserve can increase liquidity by buying government bonds, decreasing the federal funds rate because banks have excess liquidity for trade.”