Federal Reserve officials jumped into U.S. money markets to inject $53 billion Tuesday morning, and announced late last night that they would be back Wednesday morning to pump in $75 billion more. The intervention comes after borrowing rates for banks skyrocketed to 10 percent—four times its normal rate—forcing the New York Federal Reserve to attempt to get the interest rate under control. The move is the first of its kind since the 2008 global financial crisis and are aimed at easing stress in money markets caused by institutions not having enough cash on hand to absorb the record number of Treasury bonds being offered to cover for the U.S. budget deficit, Bloomberg News reports. “The underlying problem is that there isn’t enough liquidity in the system to satisfy the demand and the job of the central bank is to provide such liquidity,” Roberto Perli, a former Fed economist, told Bloomberg.
