Fed Expected to Maintain Pace of Reserve-Management Purchases
The Federal Reserve is expected to continue Treasury-bill purchases when it announces its latest reserve-management purchase plan on Thursday. With liquidity expected to decline over the coming months, policymakers want to use the purchases to bolster reserves. Strategists at Barclays and Deutsche Bank expect the Fed to buy $10 billion of Treasury bills in addition to purchases to reinvest proceeds from maturing securities. Bank of America expects the Fed could increase reserve-management purchases to $15 billion to offset potential funding pressure from increased supply. However, there is also a significant possibility that the Fed will keep the current purchase size unchanged through at least mid-September.
The Federal Reserve is expected to continue Treasury-bill purchases when it announces its latest reserve-management purchase plan on Thursday. With liquidity expected to decline over the coming months, policymakers want to use the purchases to bolster reserves.
Strategists at Barclays and Deutsche Bank expect the Fed to buy $10 billion of Treasury bills in addition to purchases to reinvest proceeds from maturing securities. Bank of America expects the Fed could increase reserve-management purchases to $15 billion to offset potential funding pressure from increased supply. However, there is also a significant possibility that the Fed will keep the current purchase size unchanged through at least mid-September.
Strategists at Barclays and Deutsche Bank expect the Fed to buy $10 billion of Treasury bills in addition to purchases to reinvest proceeds from maturing securities. Bank of America expects the Fed could increase reserve-management purchases to $15 billion to offset potential funding pressure from increased supply. However, there is also a significant possibility that the Fed will keep the current purchase size unchanged through at least mid-September.