Annual Report on Open Market Operations

This report reviews open market operations directed by the Federal Open Market Committee (FOMC) within the Federal Reserve’s System Open Market Account (SOMA), provides an overview of the Federal Reserve’s monetary policy implementation framework, and reviews balance sheet changes in 2025. It also includes illustrative projections of how securities holdings, reserve balances, and net income may change in the future.

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The Federal Open Market Committee ended runoff of the Federal Reserve’s balance sheet and directed the start of reserve management purchases during 2025. Scroll down to learn more about changes in the balance sheet during the year.

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Balance Sheet Runoff Ends

Note: Figures are weekly and include unsettled holdings. Agency CMBS are included in agency MBS amount.
Source: Board of Governors of the Federal Reserve System

SOMA securities decreased through November, guided by monthly caps. The FOMC further slowed the pace of Treasury runoff (light blue) by reducing the cap on Treasury redemptions in April from $25 billion to $5 billion, while agency MBS caps were unchanged. As a result, agency MBS accounted for most of the balance sheet reduction during the year (bright blue).

At its October meeting, the FOMC announced the end of balance sheet runoff, effective December 1. The FOMC subsequently announced the start of reserve management purchases at its December meeting to maintain ample reserve levels on an ongoing basis. The SOMA portfolio has declined by over $2 trillion since balance sheet runoff began in mid-2022.

Shifts in Federal Reserve Liabilities

Note: Figures are weekly. Other liabilities include deposits from international and multilateral organizations, government-sponsored enterprises, designated financial market utilities, and other non-reserve liabilities.
Source: Board of Governors of the Federal Reserve System

The Federal Reserve’s liabilities changed throughout the year due to balance sheet runoff, money market conditions, and other factors. Changes were mainly driven by overnight reverse repo (ON RRP) usage and the Treasury General Account (TGA).

Due to dynamics around the debt limit, the TGA (bright blue) varied between about $260 billion and $1 trillion during the year. TGA balances significantly declined in the first half of the year, before sharply increasing into the second half of the year.

ON RRP usage (dark green) gradually declined to near-zero levels during September, as money market funds reallocated to more attractive investments, including Treasury bills and private repo.

The cumulative impact of SOMA runoff, increases in TGA balances, and the decline in ON RRP usage resulted in reserve levels (light gray) declining from August through October. The end of balance sheet runoff and the start of reserve management purchases in December began the process of maintaining ample reserves going forward.

Download the 2025 Report | Data for charts

Prepared for the Federal Open Market Committee (FOMC) by the
Markets Group of the Federal Reserve Bank of New York
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