Operating Policy
Statement Regarding Agency Mortgage-Backed Securities Small Value Exercise
April 17, 2018

The New York Fed undertakes certain small value open market transactions from time to time for the purpose of testing operational readiness to implement existing and potential policy directives from the Federal Open Market Committee (FOMC). The FOMC authorizes the New York Fed’s Open Market Trading Desk (the Desk) to conduct these exercises to test its operational readiness in the Authorization for Domestic Open Market Operations and Authorization for Foreign Currency Operations.

In connection with these authorizations, the Desk intends to conduct four small value agency MBS coupon swap operations between April 24th and 25th, 2018.  Over the course of these two days, the Desk intends to swap out of the following unsettled To-Be-Announced (TBA) positions for other readily available MBS: 30-year Fannie Mae 4.0 percent coupon, 30-year Freddie Mac 4.0 percent coupon, 15-year Fannie Mae 3.5 percent coupon, and 30-year Ginnie Mae II 4.5 percent coupon securities. Each operation will have a face value of $5 million, for a total current face value of $20 million across the four operations.