Washington (AFP)

For the first time since the financial crisis, the Federal Reserve Bank (Fed) in New York has injected liquidity into the financial markets to keep its overnight rate, the main monetary tool, at a low level.

This technical intervention of $ 53 billion Tuesday will be followed by another injection of $ 75 billion Wednesday, through its tool of pension fund (repo), said the New York branch of the Central Bank.

The operation must help keep the overnight rate low. As it has already done Tuesday, the Fed will conduct this transaction on Wednesday "to keep federal funds in the range of 2% to 2.25%," she said in a statement.

Wednesday's intervention will be a little earlier than the day before markets between 8:15 and 8:30 local (midday GMT) to streamline the supply at the time the financial players refinance daily.

Repo transactions are very short-term transactions that allow banks and companies to refinance and the Fed to have another tool to influence rates.

They concern the purchase of debt securities (Treasury bills, mortgage-backed bonds) at a price fixed in advance.

- Several factors-

For technical reasons, the overnight repo rate rose sharply on Monday, far exceeding the overnight rate set by the Fed (which ranges between 2% and 2.25%).

Several factors, including a strong demand for dollars from businesses on the verge of paying a tax deadline, have boosted the repo rate and, in the process, the Fed's overnight rates. They settled at 2.25% Tuesday on the top of its range of evolution, against 2.14% Friday.

The swelling of deficits and the government's need for financing, as well as the Fed's dwindling reserves in the context of the decline in its portfolio of assets bought up massively after the financial crisis, were among the reasons advanced by analysts to explain these tensions. in short-term refinancing markets.

This technical injection of liquidity should not, however, have any impact on the central bank's monetary policy, some economists said.

The Fed Monetary Committee (FOMC) which concludes a meeting on Wednesday must announce a likely decline in overnight interbank rate of a quarter of a percentage point (0.25%) to the key.

This would be the second in two months as insurance against worries about trade and the global slowdown.

Nevertheless, the intervention of the New York Fed in the markets seemed to have sowed doubts among investors on futures products.

Suddenly Wednesday, after wagering for weeks on this new rate cut, they were a majority to think that the Central Bank would leave them unchanged, according to the evolution of products futures (futures) evaluated by CME Group.

© 2019 AFP