On January 26, 2022, the Federal Open Market Committee (FOMC) decided to continue to reduce the monthly pace of its net asset purchases in the purchase period beginning in mid-February, bringing them to an end in early March. Specifically, the FOMC directed the Open Market Trading Desk (the Desk) at the Federal Reserve Bank of New York to increase the System Open Market Account (SOMA) holdings of Treasury securities by at least $20 billion and of agency mortgage-backed securities (MBS) by at least $10 billion during the monthly purchase period beginning February 14, 2022.
In addition, the FOMC directed the Desk to maintain the existing policy of rolling over at auction all principal payments from holdings of Treasury securities and reinvesting all principal payments from holdings of agency debt and agency MBS in agency MBS.
For Treasury securities, monthly purchase schedules will not be published after mid-February and purchases will end in early March. The Desk will continue to roll over maturing Treasury security holdings by replacing maturing holdings with securities issued at Treasury auctions. These rollovers are typically accomplished by placing bids at Treasury auctions equal in par amount to the value of SOMA holdings maturing on the issue date of the securities being auctioned, allocated proportionally across those securities by announced offering amount. Bids at Treasury auctions are placed as non-competitive tenders and are treated as add-ons to announced auction sizes. For information on rollovers see Treasury Rollover FAQs.
For agency MBS, net additional purchases will end in early March, but monthly purchase schedules will continue to be issued to reflect reinvestment of principal payments from agency debt and agency MBS into agency MBS conducted in the secondary market. These reinvestment purchases will continue to generally be concentrated in recently produced coupons in 30-year and 15-year fixed rate agency MBS in the To-Be-Announced market. 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 ninth business day of the month. The Desk will also publish tentative FedTrade schedules on or around the ninth and nineteenth 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. For information on purchase amounts and schedules, see Agency MBS Operational Schedule.
Additional information on Treasury and agency MBS purchases can be found in the following locations: