the Fed has proposed a new program called the term deposit facility that would allow banks to lock up funds with the Fed beyond the overnight period which the Fed now accepts deposit. Rates could be set via auction, via formula or set administratively.
Deposits would not exceed one year and would not count as reserves, but they could be used as collateral at the discount window.
The idea is to add one more way for the Fed to drain reserves from the system.
EUR/USD is quietly changing hands at 1.4390 with speculative interest near-zero.
