(Reuters) – Establishing a standing repo facility that firms could tap as needed to borrow cash could help the Federal Reserve keep tighter control of short-term interest rates when there is an unexpected disruption to short-term funding markets, New York Fed Bank President John Williams said on Monday.
“My experience from 2019 and 2020 if anything teaches you that the unexpected happens and you need to be prepared for that,” Williams told reporters. Fed officials discussed the design of a potential standing repo facility at the June meeting but have not yet decided if they will create such a program.
Williams said setting up such a facility would not signal a move away from the Fed’s ample reserves regime.
(Reporting by Jonnelle Marte)
