Fed Cites Plans to Bolster Liquidity

The Federal Reserve has announced plans for moves to "address heightened liquidity pressures in term funding markets," including $100 billion of term repurchase transactions for which agency mortgage-backed securities, agency debt, or Treasuries may be delivered as collateral. The Fed also plans to increase the amounts outstanding in the term auction facility to $100 billion, with auctions on March 10 and March 24 increased by $20 billion each to $50 billion each. The TAF auctions are slated to be conducted "for at least the next six months unless evolving market conditions clearly indicate that such auctions are no longer necessary," the agency said. The Fed also said it would increase the size of both the repo operations and the auctions "if conditions warrant."