Fed can maintain Treasury bill purchase pace for `some time'

  • "With roughly $2.4T of Treasury bills outstanding and daily turnover of around $95B, the bill market has substantial capacity to support our activity, and we expect to be able to maintain the current pace of Treasury bill purchases for some time," New York Fed Senior Vice President Lorie Logan said in a speech at the New York Fed's annual primary dealer meeting.
  • The desk is currently purchasing Treasury bills at an initial pace of $60B per month.
  • In discussing the money market turmoil that erupted in mid-September, she said, "it’s worth noting that the quantity of reserves needed to maintain an ample reserves framework is subject to uncertainty and may change over time. Banks’ demand for reserves is not static."
  • As for the desk's temporary repurchase agreement operations, also intended to increase liquidity in the money markets, it increased repo operations, a move that "was supportive to money markets, and the federal funds rate as stable over October's month-end."
  • While money markets have calmed since the mid-September volatility, the New York Fed's Open Market Trading Desk "will continue to use its tools and adjust operational plans as needed to maintain the federal funds rate in the FOMC’s target range,"  she said.
  • ETFs: GOVT, PLW, TAPR, EGF, FIBR, USTB

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