The Federal Reserve (Fed) Bank of New York injects US$111.90 billion to financial markets on Tuesday (Nov 12) through overnight repurchase agreements totaling US$76.94 billion and a 14-day repo totaling US$34.966 billion. Eligible banks sought less liquidity than the Fed was willing to offer.

Fed repo interventions take in Treasury and mortgage securities from eligible banks in what is effectively a short-term loan of central-bank cash, collateralized by the bonds, the Wall Street Jurnal reported. The Fed’s injections are aimed at ensuring that the financial system has enough liquidity and that short-term borrowing rates remain well-behaved, with the central bank’s federal-fund rate staying within the 1.50 percent to 1.75 percent target range. The effective fed-funds rate stood at 1.55 percent on Friday.

Recent Fed market interventions aren’t designed to serve as a stimulus and so far aren’t being driven by market distress. While the sizes of recent operations are large, the practice of adding and subtracting liquidity from short-term markets to manage short-term interest rates goes back decades.