Permanent OMOs: Agency Mortgage-Backed Securities
The Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York, effective in October 2017, to gradually reduce the reinvestment of principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities (MBS) in agency MBS, consistent with the June 2017 addendum to the Committee’s Policy Normalization Principles and Plans (see for the most recent FOMC statement).

The Desk conducts agency MBS small value exercises from time to time as matter of prudent advance planning by the Federal Reserve. The exercises are conducted under the annual authorization for domestic open market operations for the purpose of testing operational readiness. They do not represent a change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future.
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