MNI POLICY: Fed To Buy $60B T-Bills/Month To Buoy Reserves

By Evan Ryser

     WASHINGTON (MNI) - The Federal Reserve said Friday it will buy Treasury

bills at an initial pace of approximately $60 billion per month in order to

maintain reserve balances at or above the levels of early September 2019. 

     The purchases, starting with the period from mid-October to mid-November,

are "purely technical measures to support the effective implementation of the

FOMC's monetary policy, and do not represent a change in the stance of monetary

policy," the Fed said, saying that they would continue at least until the second

quarter of next year 

     The FOMC also directed the Fed's New York Desk to conduct term and

overnight repo operations at least through January of next year to "ensure that

the supply of reserves remains ample even during periods of sharp increases in

non-reserve liabilities, and to mitigate the risk of money market pressures that

could adversely affect policy implementation."

     Term repo operations will generally be conducted twice per week, initially

in an offering amount of at least $35 billion per operation. Overnight repo

operations will be conducted daily, initially in an offering amount of at least

$75 billion per operation

--MNI Washington Bureau; +1 202 371 2121; email: evan.ryser@marketnews.com