The staff briefed the Committee on the possible role of a standing fixed-rate repurchase agreement (repo) facility as part of the monetary policy implementation framework; a facility of this type would allow counterparties to obtain temporary liquidity at a fixed rate of interest through repurchase transactions with the Federal Reserve involving their holdings of select securities eligible for open market operations. The staff presentation noted how such a facility could provide a backstop against unusual spikes in the federal funds rate and other money market rates and might also provide incentives for banks to ... (full story)

The Federal Reserve released on Wednesday the minutes from its two-day monetary policy meeting in June. The central bank kept interest rates unchanged at its previous meeting, but opened the door to lowering rates in July by noting it will “act as appropriate” to sustain the current economic expansion. Traders went on to price in a 100% probability of a rate cut by the Fed, the CME Group FedWatch tool shows. Fed Chair Jerome Powell bolstered those expectations on Wednesday. Powell testified in front of Congress “crosscurrents” stemming from trade and global growth were dampening the U.S. economic outlook. He also ... (full story)