Fed Auction Gets Strong Response |
| Wall Street Journal - Dec 19, 2007 |
The Federal Reserve said Wednesday it awarded $20.0 billion in 28-day credit through Monday's term auction facility offering amid strong demand. The interest rate on the facility -- the stop-out rate -- was 4.65%, below the 4.75% discount rate, the Fed said.
In the first of several auctions announced last week in a bid to alleviate a squeeze in credit markets, the Fed said it received more than $61.55 billion in bids. The bid-to-cover ratio, an indication of demand, was 3.08, the Fed said. There were 93 bidders, and each bank was allowed to submit two bids.
"The amount reflects the generally tight financial conditions but the stigma that banks had previously assigned to borrowing from the Fed under conditions of duress appeared to have diminished," said Joseph Brusuelas of IDEAglobal.
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- Posted: 2007-12-19 10:46:04
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