The New York Federal Reserve said on Thursday it would step up the amount of funds it would inject into the multi trillion dollar repo market to help investors get through the end of year period, when banks are less willing to lend out their cash. As part of the repurchasing operations, the central bank temporarily buys Treasurys and other highly rated debt from dealers in order to inject liquidity into the financial system. The Fed expanded the overnight repo operation on Dec. 31 and Jan. 2 to at least $150 billion, and said it would offer a $75 billion repo on Dec. 30. The Fed also said it would offer another longer-term repo operation that would span year-end of at least $50 billion. At its postmeeting press conference, Fed Chairman Jerome Powell said the central bank would tweak the timing and amounts of its repo operations to prevent stress in short-term funding markets from resurfacing.
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