Commodity Trade Mantra

Posts Tagged ‘Reverse Repo Program’

The U.S. Fed And It’s Secret Piggy Bank

The Fed has announced using “Reverse repos” as a new tool to manage monetary policy. Its just a way the Fed soaks up cash from financial institutions. The Fed is the “borrower,” swapping its Treasuries for banks’ cash. You might call it opposite of quantitative easing: Reverse repos drain money from the financial system.

The Message Of The Gold Forward And Reverse Repo Rates

Reverse repos are not new to the Fed’s monetary toolkit. The reasons for the reverse repo program really boil down to enforcing a lower limit, or floor, on short-term interest rates that have not conformed due to the US financial system’s quirks regarding banks vs. nonbanks.

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