The New York Federal Reserve is once again ramping up its cash injections aimed at easing stressed-out financial markets.
The NY Fed just announced it will conduct an additional overnight repo operation on Monday afternoon. The move will inject up to $500 billion into financial markets and be on top of previously scheduled operations.
The statement said the NY Fed is taking these steps to make sure the supply of reserves "remains ample" and to support the "smooth functioning" of short-term funding markets.
In other words, the Fed is trying to avoid a liquidity squeeze that sparks a financial crisis.
The US central bank is racing to calm investors freaked out by the severe disruptions caused by the coronavirus pandemic.
The Fed slashed interest rates by a full percentage point to zero Sunday evening and officially relaunched its 2008 financial crisis-era bond-buying program known as quantitative easing.
Last week, the NY Fed announced plans to inject $1.5 trillion into financial markets to smooth unusual disruptions in the Treasury market, where liquidity dried up during the market chaos.