This series is constructed as the aggregated daily amount value of the RP
transactions reported by the New York Fed as part of the Temporary Open
Market Operations.
Temporary open market operations involve short-term repurchase and reverse
repurchase agreements that are designed to temporarily add or drain
reserves available to the banking system and influence day-to-day trading
in the federal funds market.
A repurchase agreement (known as repo or RP) is a transaction in which the
New York Fed under the authorization and direction of the Federal Open
Maker Committee buys a security from an eligible counterparty under an
agreement to resell that security in the future. For these transactions,
eligible securities are U.S. Treasury instruments, federal agency debt and
the mortgage-backed securities issued or fully guaranteed by federal
agencies.
Federal Reserve Bank of New York, Overnight Repurchase Agreements: Treasury
Securities Purchased by the Federal Reserve in the Temporary Open Market
Operations [RPONTSYD], retrieved from FRED, Federal Reserve Bank of St.
Louis;
https://fred.stlouisfed.org/series/RPONTSYD
On September 17, 2019, the Federal Reserve Bank of New York began
conducting temporary open market operations through overnight repurchase
agreements: That is, it purchased Treasury securities held by banks.
From May 19, 2015 until September 16, 2019 the total amount of repurchase
agreements amounted to $923,000,000 in 6 transactions. Since September 17,
2019, there have only been 6 days where there was no repurchase agreement
activity. The total amount of money that the Federal Reserve has pumped
into the system stands at $4,169,411,000,000 as of February 14, 2020. I
chose to show the amounts fully written out so they would have the proper
impact. Another way to see it is that a little over 4,500 times as much
money has been poured into the system in a 5 month span as was added to the
system in the previous 40 months.
At the very least, the activity of the past 5 months stands out like a sore
thumb and would seem to indicate that substantial changes from what was the
norm for the previous 40 months have taken place. It definitely bears
watching to see if this becomes the new norm, and if so what has caused the
sudden dramatic change.
--
Alan W, Shrock
9513 Colegate Way
West Chester, OH 45011-9419
(513) 497-2634 (Mobile)
Latitude 39.319576500
Longitude -84.461717800
"Are we being good ancestors?" - Jonas Salk
