The US Federal Reserve may launch a standing fixed-rate repurchase agreement or a repo rate facility in 2020 to lend to banks using Treasuries and other securities as collateral, a Deutsche Bank strategist has reportedly said according to Reuters.
“We reaffirm our expectations that the Fed could test this facility later this year and launch it for full-scale operations in early 2020,” Deutsche Bank strategist Steven Zeng wrote in a research note published late on Friday.
While the Fed policymakers debated the use case of a repo facility in June, there is no consensus yet on the design of the tool.
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