Thursday, November 1, 2007

Fed Injects Cash into Financial System

From the AP:

“The Federal Reserve Bank of New York, which carries out the central bank's open market operations, moved Thursday to inject $41 billion in temporary reserves into the U.S financial system. It came as part of ongoing efforts designed to ensure that the markets -- which have suffered through a period of turbulence over the last few months -- function smoothly. The cash infusion came in three separate operations. A New York Fed spokesman said it was the largest single day of operations since $50.35 billion was pumped into the system on Sept. 19, 2001, following the terror strikes on New York and Washington. He declined further comment.”

From Reuters:

“The total on Thursday surpassed the $38 billion the Fed injected on Aug. 10, which was generally seen as the beginning of a global credit crisis. At the time, the Fed and the European Central Bank ramped up temporary liquidity operations with the intent of alleviating strains in short-term lending markets.”

From Bloomberg:

“The Fed today added $41 billion in temporary reserves to the banking system, the largest one-day cash infusion since the terrorist attacks of September 2001. The amount reflects the central bank's effort to push the effective rate lower after policy makers reduced their target yesterday.”

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