On Tuesday morning, the NY Fed launched what’s called an “overnight repo operation,” during which the central bank attempts to ease pressure in markets by purchasing Treasuries and other securities. The goal is to pump money into the system to keep borrowing costs from creeping above the Fed’s target range.
The episode demonstrates evidence of emerging strains in financial markets and raises concern that the Federal Reserve could be losing its grip on short-term rates.”
The NY Fed injected a 53 billion dollar band aid into the overnight lending market on the eve before they will announce another rate cut. These moves get little press, but they are another sign that there is a lot more going on than just the Federal reverse cutting interest rates.
Here is an article that I really like that explains the Repo operation: https://www.msn.com/en-us/money/markets/a-crack-just-emerged-in-the-financial-markets-the-new-york-fed-spends-dollar53-billion-to-rescue-the-overnight-lending-market/ar-AAHr9oG?ocid=spartanntp