These small value exercises involve end-to-end processes (from trading through settlement) and are relatively small in size. These exercises are conducted for the purpose of maintaining operational readiness, rather than to fulfill a policy directive, and therefore do not indicate anything about the future timing or direction of changes in policy.
Pursuant to the FOMC Authorizations and Continuing Directives for Open Market Operations, the New York Fed's Open Market Trading Desk (the Desk) conducts these exercises to test its operational readiness. The FOMC has approved a process whereby the Desk identifies operations each year to test with small value exercises. The Desk notifies the FOMC in advance of executing these small value exercises, which are conducted throughout the year. Information on the operational readiness testing that has occurred is included in regular communications on Desk activity such as the Annual Report on Domestic Open Market Operations. The exercises selected do not reflect anticipated policy directives or changes in the direction of policy.