Based on our initial experience, it appears that the TAF may have overcome the two drawbacks of the discount window, in that there appears to have been little if any stigma associated with participation in the auction, and – because the Fed was able to set the amounts to be auctioned in advance – the open market desk faced minimal uncertainty about the effects of the operation on bank reserves.
The TAF may thus become a useful permanent addition to the Fed’s toolbox. 3 TAF auctions will continue as long as necessary to address elevated pressures in short-term funding markets, and we will continue to work closely and cooperatively with other central banks to address market strains that could hamper the achievement of our broader economic objectives.