WASHINGTON (Thomson Financial) - The US Federal Reserve will conduct the
second of its expanded 50 bln usd auctions through its Term Auction Facility
(TAF) today.
The 28-day credit will be auctioned at a minimum rate of 2.19 pct, 0.06 pct
points below the 2.25 pct target Fed funds rate and 0.31 pct points below the
discount rate.
On March 10, the first 50 bln usd TAF auction produced a 2.80 pct rate --
below the 3.00 pct Fed funds target of the time -- with a 1.85 bid-to-cover
ratio with 82 bidders.
The Fed raised the March auctions to 50 bln usd from 30 bln usd on the Feb
29 auction and said it would continue to increase the auction sizes if
conditions in the financial markets warranted it.
In the same announcement earlier this month, the Fed said it would continue
TAF auctions for at least six months. It said it would conduct the first of a
series of 28-day term repurchase agreements with primary dealers, expected to
total 100 bln usd.
These term repo operations gave investment companies access to the Fed's
discount window -- normally limited to banks -- for the first time since the
1930s.
dennis.moore@thomson.com
dem/wash/cmr
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