In September 2019, there was a sudden and unexpected spike in interest rates on overnight repurchase agreements (or "repos") – short-term loans between financial institutions. The interest rate on overnight repos in the United States increased from 2.43 percent on September 16 to 5.25 percent (graph shown). During the trading day, interest rates reached 10 percent. The Federal Reserve Bank of New York injected $75 billion into the repo market on September 17 and every morning for the rest of the week. On September 19, the Federal Reserve lowered the interest paid on bank reserves. These actions calmed the markets and, by September 20, rates had returned to a stable level. The Federal Reserve Bank of New York continued to regularly provide liquidity to the repo market until June 2020. Economists identified the main cause of the spike as a temporary shortage of cash available in the financial system, caused by the deadline for the payment of quarterly corporate taxes and the issuing of new Treasury securities.
Read more: <https://en.wikipedia.org/wiki/September_2019_events_in_the_U.S._repo_market> _______________________________ Today's selected anniversaries: 1940: Second World War: Italian forces captured the town of Sidi Barrani, but their invasion of Egypt progressed no further. <https://en.wikipedia.org/wiki/Italian_invasion_of_Egypt> 1961: The U.S. National Hurricane Research Project sought to weaken Hurricane Esther by seeding it with silver iodide, leading to the establishment of Project Stormfury. <https://en.wikipedia.org/wiki/Project_Stormfury> 1982: A Lebanese militia under the direct command of Elie Hobeika carried out a massacre in the Palestinian refugee camp of Sabra and Shatila, killing at least 460 civilians. <https://en.wikipedia.org/wiki/Sabra_and_Shatila_massacre> 1990: Construction of the Northern Xinjiang railway was completed between Ürümqi South and Alashankou, linking the railway lines of China and Kazakhstan, and adding a sizeable portion to the Eurasian Land Bridge. <https://en.wikipedia.org/wiki/Eurasian_Land_Bridge> _____________________________ Wiktionary's word of the day: pellucid: 1. Allowing the passage of light; translucent or transparent. 2. (figuratively) 3. Easily understood; clear. 4. Of music or some other sound: not discordant or harsh; clear and pure-sounding. 5. Of a person, their mind, etc.: able to think and understand clearly; not confused; clear, sharp. 6. (archaic) Easily recognized or seen through; apparent, obvious. 7. (obsolete, rare) Something which allows the passage of light; a translucent or transparent object. <https://en.wiktionary.org/wiki/pellucid> ___________________________ Wikiquote quote of the day: In a hierarchy every employee tends to rise to his level of incompetence. --Laurence J. Peter <https://en.wikiquote.org/wiki/Laurence_J._Peter> _______________________________________________ Wikipedia Daily Article mailing list. To unsubscribe write to: [email protected] Questions or comments? Contact [email protected]
