The Fed announced today intentions to pump in liquidity

In response to heightened pressures in the money markets for funding through year‐end the NY Fed announced this morning that it will be pumping in liquidity into the money markets via a series of overlapping long term repo agreements that will extend into year‐end. They pre‐announced the first repo operation that will take place on Wednesday, November 28th and mature on January 10, 2008 for an amount of $8billion. The timing and amounts of subsequent term operations spanning the year‐end will be influenced by market and reserve developments according to the Fed. Ultimately the goal of the Fed is to provide sufficient reserves into the system to resist upward pressure on the Fed funds rae that would drive it up above the Fed target rate. However, as we have seen just recently at the end of this summer into September, the Fed is likely to err on the side of adding too much reserves and we could see the effective Fed funds rate trade below thetarget.