Treasury Debt Auctions and Buybacks as Fiscal Agent

The Federal Reserve Banks provide a range of fiscal agency services to the U.S. government, for which they are reimbursed by the U.S. Treasury and other U.S. government agencies.

The U.S. Treasury issues debt in order to fund the U.S. government's operations and programs, and seeks to do so in a manner that achieves the lowest cost of funding for the U.S. taxpayer over time. The U.S. Treasury market is the largest and most liquid sovereign debt market in the world.

In its capacity as fiscal agent of the United States, the New York Fed supports Treasury's marketable securities auctions. The New York Fed also executes buybacks of Treasury debt as directed by Treasury.

Auctions

The U.S. Treasury offers a wide variety of marketable securities to the public at auction, including bills, notes, bonds, floating-rate notes, and Treasury inflation-protected securities (TIPS). As fiscal agent of the United States, the New York Fed is responsible for conducting auctions and all auction-related settlement activities. The New York Fed also supports the U.S. Treasury by ensuring resiliency of critical auction functions and compliance with all auction rules and regulations.

U.S. Treasury securities purchased at auction are delivered to buyers through the National Book Entry System. Participation in U.S. Treasury auctions is open to a wide range of individuals and firms.

Buybacks

In 2000, the U.S. Treasury announced the re-introduction of debt buybacks as a tool to manage the composition or overall size of the public debt. This program enhanced the liquidity of Treasury securities and helped to reduce the U.S. government's financing costs over time.

As fiscal agent of the United States, the New York Fed conducts Treasury buyback operations when directed to do so by Treasury. Since October 2014, Treasury has directed the Open Market Trading Desk of the New York Fed to conduct periodic small value Treasury securities buybacks for the purpose of ensuring operational readiness.