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Permanent Open Market Operations |
| Purchases or sales of securities on an outright basis that add or drain reserves and change the size or the composition of the System Open Market Account (SOMA) portfolio are among the tools used by the Federal Reserve to implement monetary policy. |
Treasury |
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Purchases or sales of Treasury securities on an outright basis have been used historically to manage the supply of reserves in the banking system. Traditionally, purchases of Treasury securities for the SOMA were conducted to offset factors that permanently drain balances from the banking system, including U.S. currency in circulation, among other factors. These actions would be taken to maintain conditions in the market for bank reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC). In recent years, the FOMC has directed the Desk to change the size or the composition of the SOMA's Treasury portfolio in order to influence longer-term interest rates and support broader financial conditions.
Operations ››
FAQs: Maturity Extension Program ›› |
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Agency MBS |
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On November 25, 2008, the FOMC first announced the purchase of agency MBS securities to support the mortgage and housing markets and foster improved conditions in financial markets more generally. On September 21, 2011, the FOMC directed the Open Market Trading Desk at the Federal Reserve Bank of New York to reinvest payments from its holdings of agency debt and agency MBS in agency MBS in order to help support conditions in mortgage markets and contribute to a stronger economic recovery. Operations Summary ›› Agency MBS Tentative Purchase Amounts and Historical Operational Results ›› FAQs: Reinvestments of Agency Securities into Agency MBS ›› FAQs: Agency MBS CUSIP Aggregation ›› |
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