Fed will provide cash to bolster short-term lending market

WASHINGTON — The Federal Reserve plans to continue pumping money into a crucial corner of the financial markets that banks and others use for short-term loans but that has suffered recent shortfalls.

The New York Fed, which handles the central bank’s dealings with financial markets, says it will keep providing up to $75 billion for overnight loans through Nov. 4, an extension of its previous deadline of Oct. 10. Additional funds will also be available for six- and 14-day loans.

The funding is intended to keep the Fed’s benchmark interest rate between the range of 1.75% and 2%, which its policymakers set after they met Sept. 18. The New York Fed began providing the money last month after a shortage of cash temporarily drove the effective rate above the Fed’s target range.

Christopher Rugaber, The Associated Press