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The Fed may have to do more to calm the stress in the short-term lending market

October 29, 2019


Federal Reserve Chairman Jerome Powell is expected to say the Fed will do whatever it takes to keep short-term funding markets calm, but he is not yet likely to have a longer-term solution for recent stress in the market.

Market pros say it’s possible the Fed may ultimately have to expand its balance sheet even more through a new quantitative easing program, in addition to steps it’s already taken. It also is expected to make a permanent, standing repo operation, instead of just temporary ones.

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