Federal Reserve Bank of New York President John Williams said in an interview on Friday that the overnight repurchase agreement market may experience fluctuations similar to those seen in the short-term bond market at the end of September.
"Clearly, market participants have been preparing for this in anticipation of certain pressures," Williams said. "We see market participants taking regular repurchase agreements and other measures to ensure they are ready for the end of the year to avoid being caught off guard."
Williams stated that the financial system has ample liquidity and that the Federal Reserve has many tools to address any potential issues.
The New York Fed President pointed out that the fluctuations in the repurchase market did not spread to the federal funds and stated that the turmoil in the financing sector is "brief."