Fed conducting 5-day reverse repo operation

NEW YORK, Oct 20 (BestGrowthStock) – The U.S. Federal Reserve on
Wednesday afternoon was conducting a five-day reverse
repurchase agreement, the New York Federal Reserve said.

In a reverse repo, the central bank exchanges
mortgage-backed securities, agency bonds or Treasuries for cash
with bond dealers and money market mutual funds. This is a tool
for the Fed to reduce the $1 trillion of excess reserves in the
banking system.

The vast excess reserves have resulted from emergency
programs the Fed and the government created to combat the
recession and the global credit crisis.
(Reporting by Chris Reese; Editing by James Dalgleish)

Fed conducting 5-day reverse repo operation