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Federal Reserve looks to avoid the September corporate tax fiasco

The Federal Reserve have become attentive towards a few warning signs recently.

For a long time and in many months, the central bank has pumped many billions of dollars into the very important however majorly hidden financial market corners. This is going to step the funding up of the repo market through the Fed as this year is coming to an end any cash crunch is going to be staved off.

The repurchase market is part of the global financial system’s internal workings and is worth over $2 trillion. These loans are the very short term loans which range often between the bigger markets of mutual fund loaning money for a day to the hedge funds, banks and the others that are pledging investments they have as collateral. In the month of September, the borrowing repo rates had shot up. A few had blamed the payments of corporate taxes which were due in the month of September. The Bond investors had to also pony the cash up for the government in the middle of September for the bonds of government that they had given a commitment for buying.

The Fed had put cash into these repo markets to make it settle down and keep the rates of borrowing low. This was the most important intervention of the Federal Reserve since the days of the Great Recession.

It appears that the bank is trying to get ahead of the repeat potentially in the coming week as the last installment of taxation is due on Monday for the corporations as it can suck the cash available out of the markets overnight and repeat what happened in September.

Jane Muniz
Jane Muniz Subscriber
Content Writer At The News Ledger 24

Jane pursued a Degree of Doctor of Medicine and holds 3 years of experience in the Health domain. Together with her outstanding management skills, she holds strong leadership skills that make her a promising personality to represent our Health department. She is the Content Writer of the Health Department from the last 2 years. Jane was full-time practitioner in the Health domain before joining our news portal. She loves to write news reports with precision and never misses the key elements of that news report.

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