Fed extends pause on reserve management purchases to October

The hiatus signals the Fed is confident in the smooth functioning of funding markets. — Bloomberg

NEW YORK: The Federal Reserve (Fed) says for the second straight month it won’t buy treasury bills for reserve management purposes in the upcoming period, an indication that policymakers are comfortable with the level of bank reserves in the financial system.

While the New York Fed’s open markets desk doesn’t plan on conducting reserve management purchases (RMPs) over the monthly period ending Oct 14, it still plans on buying about US$15.6bil in reinvestment purchases over the time, according to its website.