Fed Chair Jerome Powell at a meeting in Washington last month. Aaron Schwartz/EPA/Shutterstock By
Matt Grossmanand
Sam GoldfarbThe Federal Reserve is struggling to persuade some banks to use a lending tool designed to improve the central bank’s control over short-term money markets.
Banks have made more use of the tool, called the standing repo facility, over the past month. But there are signs some are reluctant to tap it more aggressively, which would make it easier for the Fed to maintain a firm grip on rates as it winds down shrinking its $6.6 trillion asset portfolio. At a recent private meeting, some executives told the New York Fed they worry using the facility would carry a stigma, undermining the tool’s purpose as volatility increases.
Copyright ©2025 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
