Afraid to ask or not, all you really wanted to know about the recent Fed liquidity injection…
Tuesday, August 21, 2007Check out former FRBoNY Director of Research Stephen Cecchetti’s F.A.Q. on the Fed’s emergency injection of liquidity in early August using mortgage-security backed repurchase agreements (repos). The explanation is really clear, complete with illustration. I am a bit skeptical of the claim
The Fed isn’t spending the money on bailing out banks, hedge funds, or helping rich people.
but it’s otherwise an excellent piece that describes the mechanism, the scale, and the reasons.