Treasury Securities

The New York Fed is authorized by the Federal Open Market Committee (FOMC) to buy and sell Treasury securities for the System Open Market Account (SOMA) to the extent necessary to carry out the most recent FOMC directive.

Purchases of Treasury securities, which are conducted by the New York Fed's Open Market Trading Desk (the Desk), are executed with primary dealers.

The Desk purchases Treasury securities in the secondary market and rolls over maturing Treasury security holdings in the SOMA portfolio at auction, as directed by the FOMC. Details are outlined in the most recent operating policy statement. Additional information is available in our Frequently Asked Questions on purchases and rollovers.

Historically, the Desk purchased Treasury securities outright in the secondary market as needed to keep pace with the amount of currency in circulation—traditionally the Federal Reserve's largest liability—which increased over time as the economy grew. Since the end of 2008 the FOMC has directed the Desk to expand the holdings of Treasury securities in the SOMA portfolio on several occasions to implement monetary policy efficiently and effectively. In addition to Treasury securities, other securities purchases have included agency mortgage-backed securities, agency debt securities and agency commercial mortgage-backed securities.

The New York Fed also provides limited transaction services, including purchases and sales of Treasury securities, to its official sector account holders. These include about 200 central banks, governments, and official institutions, many of whom do not have in-house capacity to conduct trading activity in the Treasury market.

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