Fed Extends and Expands Municipal Liquidity Facility

The Federal Reserve made a late day announcement that it will expand and extend its Municipal Liquidity Facility to include bonded debt obligations up to three years in maturity.  The maturity maximum was originally 24 months. Today’s statement also specifies that the program will be eligible to counties with a minimum population of 500k and also to cities with at least 250k residents. The program was also extended until year’s end.

The Treasury market ended its day with the Ten-Year slipping about 5/8 point in price for a yield of about 66 basis points.  The Long-Bond sits at 1.25%. Today’s only data point came from the Dallas Fed when it reported its Manufacturing Index slipped to minus 73.7 from minus 70 and that was slightly better than the minus 75 that was expected.