Fed maintains $10 billion in Treasury bill purchases
The Federal Reserve said on Monday that it would purchase about $10 billion in Treasury bills this cycle, the same size as the previous two operating cycles. Policymakers are currently trying to shore up bank reserves to prepare for possible capital outflows in the coming months. Website information shows that the New York Fed’s open market trading department plans to perform the above-mentioned reserve purchase management in the monthly operating cycle ending on August 13, and also plans to carry out reinvestment operations of approximately US$17.6 billion. Although the Fed believes funding markets are operating smoothly, policymakers remain cautious as the U.S. Treasury is expected to increase the supply of Treasury bills and lift cash balances to more than $1 trillion, which will drain reserves. All of this money must come from somewhere, and as bank reserves are withdrawn from the financial system, reduced liquidity tends to drive up funding costs. Open a futures account on Sina's cooperative platform, safe, fast and guaranteed