A week removed from dropping interest rates another quarter point, the Federal Reserve is now having to conduct repurchase operations in order to ensure that it hits its targeted federal funds rate of between 1.75% to 2%.

A CNBC report recently stated that the Fed “is in the process now of conducting overnight repurchase, or repo, operations to make sure that funding for overnight loans stays constant and the funds rate trades within its targeted range of 1.75%-2%. In announcing the program, officials noted that the last time such a process happened was 11 years ago, amid the grim days of the crisis when liquidity dried up and caused a panic on Wall Street.”

The situation is eerily similar to what happened in the midst of the final crisis over a decade ago.

“Anytime you have anything juxtaposed to 2008, it tends to cause anxiety. What it did was suggest that the Fed doesn’t have a handle on this,” said Quincy Krosby, chief market strategist at Prudential Financial. “They weren’t able to foresee this. That said, if they could come up with a facility for this, the issue will dissipate as a source of concern.”

The repurchase program is said to continue through October 14 where the Fed will purchase safe haven assets like Treasury notes in exchange for cash to help stay within the targeted funds range. Other measures include growing is balance sheet via more asset purchases.

“The balance sheet is incredibly important,” Rick Rieder, global chief investment officer of fixed income at asset management giant BlackRock, said at last week’s Delivering Alpha. “The Fed needs to let the balance sheet grow. [Powell] alluded to it and you saw it played out in spades [last]week.”

Federal Reserve Chairman Jerome Powell said last week that growing its balance sheet is something the central bank is looking to pursue.

“Going forward, we’re going to be very closely monitoring market developments and assessing their implications for the appropriate level of reserves,” Powell said at a news conference following last week’s announcement of a rate cut. “And we’re going to be assessing the question of when it will appropriate to resume the organic growth of our balance sheet.”

The most important thing, according to Krosby, is that the Fed do what’s necessary in order to restore market confidence.

“They need to restore not just confidence,” Krosby said. “Empirically, they need to restore the balance sheet to a level that keeps the equilibrium between supply and demand intact.”

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