NEW YORK—On October 29, 2014, the Federal Open Market Committee (FOMC) directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to conclude the current asset purchase program by the end of October. The FOMC also directed the Desk to maintain the existing policy of reinvesting principal payments from the Federal Reserve’s holdings of agency debt and agency MBS in agency MBS and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
Reinvestments in agency MBS will continue to be concentrated in newly-issued agency MBS in the To-Be-Announced (TBA) market. The Desk will adjust the number of individual agency MBS operations per month as needed for operational efficiency. The distribution of agency MBS purchases could change if market conditions warrant.
The planned amount of reinvestments in agency MBS that are anticipated to take place over each monthly period will continue to be announced on or around the eighth business day of the month. For the remainder of the current reinvestment period, which ends on November 13, 2014, the Desk will continue to publish a tentative schedule of FedTrade agency MBS operations on or around the last business day of each week for a weekly period beginning the following business day.
Beginning November 13, 2014, the Desk will publish the tentative FedTrade schedule on or around the eighth and eighteenth business days of each month for a period beginning the following business day and continuing through the date of the release of the next schedule.
Consistent with current practices, the purchases of agency MBS will be conducted with the Federal Reserve’s primary dealers through a competitive bidding process and results will be published on the Federal Reserve Bank of New York’s website. The Desk will continue to publish transaction prices for individual operations at the end of each monthly period. All other purchase details remain the same at this time.
Additional information on reinvestments in agency MBS and Treasury rollovers can be found in a set of Frequently Asked Questions in the following location: