Embarrassed Fed Steps In Again but Fails to Stabilize New York Stock Market

[Asia Economy New York=Correspondent Baek Jong-min] The United States central bank, the Federal Reserve (Fed), once again provided ultra-short-term liquidity on the 16th (local time), a day after deciding to cut interest rates, but the market is still unable to escape a sharp decline.

[Image source=Reuters Yonhap News]

The New York Federal Reserve announced on the 16th that "in line with recent Federal Open Market Committee (FOMC) measures, overnight repurchase agreement (repo) transactions will be operated with a limit of $500 billion." This is separate from the existing overnight repo limit of $175 billion.

The New York Fed is also operating two-week repo transactions with a limit of $45 billion, and on the 12th and 13th, it operated one-month and three-month repo transactions with a total limit of $1.5 trillion.

The Fed announced a zero-rate cut the day before and stated that it would purchase $500 billion in Treasury securities and $200 billion in mortgage-backed securities (MBS), effectively starting quantitative easing (QE).

Despite the Fed's aggressive responses day after day, the New York stock market has not escaped the plunge on this day. As of 3 p.m., the S&P 500 index on the New York Stock Exchange is down 8.02% at 2493.48.

The Dow Jones Industrial Average is trading down about 9%, or 2,000 points, with Boeing, an aviation company, seeing its stock price plummet by 19.49%.

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