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January/February 2009, 
Vol. 91, No. 1
Posted 2009-01-01

The Fed, Liquidity, and Credit Allocation

The current financial turmoil has generated considerable discussion of liquidity. Moreover, it has been widely reported that the Federal Reserve played a major role in supplying liquidity to financial markets during this distressed time. This article describes two ways in which the Fed has supplied liquidity since late 2007.