Fed Expands Short-Term Liquidity Supply... Trump Reviews Financial Situation

President Trump is meeting with Wall Street financial company CEOs at the White House on the 11th. [Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] Amid the turmoil in the U.S. financial market caused by the novel coronavirus disease (COVID-19), the U.S. central bank, the Federal Reserve (Fed), has decided to further expand short-term liquidity supply. President Donald Trump met with CEOs of Wall Street financial firms to review the financial market situation.

According to CNBC, a U.S. economic media outlet, on the 11th (local time), the New York Federal Reserve Bank, which is responsible for the Fed's open market operations, announced that it would increase the limit for overnight repurchase agreement (Repo) transactions supplying ultra-short-term liquidity from the existing $150 billion to $175 billion. This measure will start on the 12th and continue until April 13. Additionally, it will extend at least $45 billion worth of two-week term Repo transactions and provide at least $50 billion worth of one-month Repo transactions.

The New York Fed took this additional step just two days after announcing on the 9th that it would raise the Repo transaction limit from $100 billion to $150 billion.

The New York Fed reaffirmed its previous stance, stating that this is "a measure to ensure banks maintain sufficient reserves and to alleviate pressure on financial markets that could adversely affect policy implementation." It also emphasized that "this measure is intended to support the smooth functioning of capital markets."

Following the New York Fed's action, President Trump and CEOs of Wall Street financial firms met at the White House to exchange views on the financial market situation related to COVID-19.

At the meeting, President Trump reportedly said, "I have made a decision to resolve the COVID-19 issue. The U.S. financial firms and financial industry are strong, and this disruption will be short-lived."

A CEO attending the meeting expressed the opinion that "the financial system is in good condition, and we will overcome this."

This content was produced with the assistance of AI translation services.