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Permanent Open Market Operations

Purchases or sales of securities on an outright basis that add or drain reserves and change the size of the System Open Market Account (SOMA) portfolio are amongst the tools used by the Federal Reserve to implement monetary policy.

Treasury

Purchases or sales of Treasury securities on an outright basis have been used historically as a tool to manage the supply of bank reserves to maintain conditions in the market for reserves consistent with the federal funds target rate set by the Federal Open Market Committee (FOMC). On March 18, 2009, the FOMC announced a longer-dated Treasury purchase program with a different operating goal, to help improve conditions in private credit markets. On August 10, 2010, the FOMC directed the Open Market Trading Desk at the Federal Reserve Bank of New York to keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities (MBS) in longer-term Treasury securities. Operations ›› Tentative Outright Treasury Operation Schedule ›› FAQs: Reinvestment of Principal Payments on Agency Debt and Agency Mortgage-Backed Securities in Treasuries ›› Longer-dated Treasury Purchase Program FAQs ››

Agency MBS

The program to purchase agency MBS was intended to provide support to mortgage lending and housing markets and to foster improved conditions in financial markets more generally. Agency MBS purchases were conducted by investment managers acting as agents for the SOMA. Operations ›› FAQs ››

Agency

The program to purchase direct obligations from housing-related GSEs was intended to reduce the cost and increase the availability of credit for the purchase of homes. Operations ›› FAQs ››