FOMC considers using repo facility
But some committee members warn over possible financial stability risks
The Federal Open Market Committee is assessing a new tool but several officials are unconvinced of its effectiveness, the minutes of its June 18 and 19 meeting reveal.
The FOMC is currently exploring the idea of introducing a standing repurchase agreement (repo) facility as part of its long-running monetary policy framework.
The repo facility’s advocates say it would give the FOMC greater control over market rates and reduce the demand for bank reserves. It would do this by providing a
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