The Federal Reserve may need to continue its open market operations and intervention in the repo markets in 2020, former Atlanta Fed president Dennis Lockhart said.
The Federal Reserve may need to continue its efforts to calm the overnight lending market in the new year, former Atlanta Fed president Dennis Lockhart told CNBC on Friday.
"That's a little bit of a trial and error kind of thing," Lockhart said. "And they have been injecting more bank reserves into the system to try to make sure the repo market first got through year end, which we'll see in the next couple of days, and secondly continues without undo volatility." Lockhart said he does not view the Treasury purchases as a return of quantitative easing practices, which the Fed used after the 2008 financial crisis, but as part of a strategy to settle the repo market. Fed Chairman Jerome Powell has said the purchases are "Quantitative easing refers to the Fed's program of buying mortgage backed securities and other assets after the financial crisis in an attempt to stabilize the financial system and stimulate the economy.
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