The Federal Reserve Bank of New York on Thursday morning injected $75 billion into money markets to help keep the fed funds rate within its target range between 1.75 percent and 2 percent.
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Thursday’s operation, which saw $83.875 billion worth of bids submitted, was the third straight day the Fed was forced to enter the market and provide liquidity.
The central bank has so far injected $203 billion into the overnight funding market after short-term rates spiked as high as 10 percent earlier in the week, stoking worries the central bank was losing control over its main policy rate.
The Federal Reserve on Wednesday cut its federal funds rate for the second time in as many meetings, citing weakening exports and low inflation. At the press conference following the Fed’s decision, Chairman Jerome Powell addressed the repo purchases.
“For the foreseeable future, we’re going to be looking at it, if needed, doing the sorts of things we did the last two days, these temporary open market operations," he said. "That’ll be the tool we use.”