operating policy

Statement Regarding System Open Market Account Activity

December 3, 2007

On Thursday, December 6, 2007, the Federal Reserve's System Open Market Account will redeem $5 billion of Treasury bill holdings. This action is designed to give the Federal Reserve Open Market Trading Desk (the "Desk”) greater flexibility in the day-to-day management of reserve levels.

The Desk will continue to evaluate the need for the use of other tools to add flexibility to its open market operations. These may include further Treasury bill redemptions, reverse repurchase agreements and Treasury bill sales.