More permanent role seen for Fed's repurchase program

April 1, 2015 6:41 PM

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STONE MOUNTAIN, Ga., April 1 (Reuters) - A pledge by the U.S. Federal Reserve to phase out a new tool to lift interest rates is being challenged by economists and financial professionals who think the central bank may need to keep using it longer than Fed officials expect.

As the Fed approaches an interest rate hike - expected later this year - it will use a suite of tools, including an overnight reverse repurchase facility (ON RRP) for money market funds to help lift its traditional federal funds rate from near zero.

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