By Daniel Strauss
The Federal Reserve (click here) continued its ongoing effort to stabilize shaky money markets on Friday with another round of capital injections totaling roughly $72 billion.
The central bank sold $22.7 billion in overnight repurchase agreements, or repos. It also offloaded $49 billion worth of repos scheduled to expire in 14 days. The latest operation was undersubscribed, meaning banks placed fewer bids for repos than the Fed offered.
The slump in demand comes after the central bank doubled the size of its repo operations on Thursday. Both Wednesday and Thursday's offerings were oversubscribed as banks showed a willingness to buy more repos than the Fed was selling....
