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In a statement published on Tuesday, the Federal Reserve Bank of New York announced that it will conduct an additional overnight repurchase agreement (repo) operation for up to an aggregate offered amount of $500 billion with a minimum bid rate of 0.1%.

“This action is taken to ensure that the supply of reserves remains ample and to support the smooth functioning of short-term U.S. dollar funding markets,” the NY Fed noted in its statement.

Market reaction

The S&P 500 Index, which erased almost all of its earlier gains in the last hour, gained traction and was last up 1.75% on the day.