New York Fed to conduct overnight repo

The NY Fed announced a repo operation that will be up to $75B in order to keep Fed funds in range. The operations are only conducted with primary dealers and this is the first one since May 2016.

From the Fed's explainer:

Repo and reverse repo operations were used prior to the financial crisis to adjust the supply of reserve balances and keep the federal funds rate around the target level established by the FOMC. At that time, repo operations were typically conducted daily to fine-tune the supply of
reserves in the system.

In a repo transaction, the Desk purchases Treasury, agency debt, or agency mortgage-backed securities (MBS) from a counterparty subject to an agreement to resell the securities at a later date. It is economically similar to a loan collateralized by securities having a value higher than the loan to protect the Desk against market and credit risk. Repo transactions temporarily increase the quantity of reserve balances in the banking system.

The Fed has pivoted to using interest on excess reserves as its primary tool and it's unclear why this happened but you can be sure that Powell will be asked for explanations tomorrow.

Here's the statement from the Fed.