🚨 The Federal Reserve 🇺🇸 is pumping $13.5 billion of liquidity into the American banking system through repo operations, marking the second-largest liquidity injection since the COVID-19 pandemic, surpassing even the levels seen at the height of the Dot Com bubble!
Explanation:
1. The Federal Reserve's emergency action indicates pressures or a liquidity shortage within the banking system.
2. Repo: A short-term borrowing process where a bank or entity sells securities to the counterparty (like the Federal Reserve) with an agreement to repurchase them at a specified price later — a quick way to provide immediate liquidity.
3. The Dot Com bubble: A speculative wave in the late 1990s on emerging internet companies that led to inflated stock prices followed by a sharp collapse around 2000 when it became clear that many of these companies were not profitable.
