Bazooka? Fed jacks up repo operations

Mar. 12, 2020 1:12 PM ETFinancial Select Sector SPDR ETF (XLF), FAS, FAZ, VFH, BAC, JPMXLF, VFH, BAC, JPM, FAS, FAZBy: Liz Kiesche, SA News Editor207 Comments
  • The Fed makes a number of changes "to address highly unusual disruptions in Treasury financing markets associated with the coronavirus outbreak."
  • The three major U.S. stock averages pare their declines. The S&P 500 falls 6.0% after having declined as much as 8.8%; the Nasdaq -5.7% vs. 8.7% earlier, and the Dow -6.0% vs. 9.6% earliers.
  • The central bank will conduct Treasury purchases across a range of maturities as part of its $60B reserve management purchases for the month starting March 13.
  • Today, the Open Market Trading Desk will also offer $500B in a three-month repo operation at 1:30 PM ET.
  • Tomorrow, it will further offer $500B in a three-month repo operation and $500B in one-month repo operation for same-day settlement.
  • Bank stocks pare their declines with the news. Bank of America (NYSE:BAC), which had fallen as much as 11% earlier, is now down 5.1%. JPMorgan Chase (NYSE:JPM), which lost as much as 10% earlier, is down 5.4%.

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