Fed to buy $60 billion in Treasury bills monthly to ensure ‘ample’ reserves

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WASHINGTON (Reuters) – The Federal Reserve said on Friday that it would begin buying about $60 billion per month in Treasury bills to ensure “ample reserves” in the banking system, a program that will continue at least until the second quarter of 2020.

The program is in response to recent disruptions in short- term money markets that pushed the target federal funds rate to the top of its range. The Fed deemed the move “technical,” and not a change in the “stance” of monetary policy. The Fed also said it would offer regular repurchase agreements at least through January to ensure there are ample reserves even during spikes in demand.



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