The Federal Reserve Bank of New York has added money-market funds to its counterparties, with which it conducts reverse repurchase agreements, The Wall Street Journal reports. Vanguard, Fidelity Investments and Federated Investors have expressed interest in the repo deals.
The New York Fed, which traditionally conducts reverse repos with primary dealers, will expand the counterparties, starting with money funds, with which it conducts reverse repos. The bank may need to drain about $800 billion worth of reserves from the financial system, with $500 billion of that expected to come through reverse repos.
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