New York Fed's Perli: Treasury bill purchases have no preset path, will monitor October issuance
New York Federal Reserve official Roberto Perli stated that the Fed's purchases of U.S. Treasury bills for reserve management are not on a predetermined path and will be adjusted based on market conditions. Currently at zero, these purchases may resume if needed to maintain ample bank reserves. Perli said the New York Fed will monitor funding market stress, particularly with a large net Treasury bill issuance expected in October.
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New York Fed's Perli: Treasury Bill Purchases Depend on Market Conditions
New York Federal Reserve official Roberto Perli stated that the Fed will continue to assess reserve levels, as purchases of U.S. Treasury bills are not on a preset path. Perli noted that earlier this year, the Federal Open Market Committee authorized the New York Fed's market operations desk to adjust reserve management purchase sizes autonomously. In prepared remarks for a New York event, Perli said these purchases, currently at zero, have been adjusted based on 'changing conditions.' He added that the Fed is ready to adjust purchase sizes again in the future to implement the FOMC's policy of keeping reserves in an ample range. Perli indicated the New York Fed will monitor senior financial officers' views on market conditions and other signs of stress in funding markets. He specifically noted that if, as observers expect, there is another large net issuance of Treasury bills in October, the Fed will watch how the market reacts.
New York Fed Official: No Preset Path for Treasury Purchases, Watching October Funding Pressure
Roberto Perli, head of the New York Fed's markets division, stated that the Federal Reserve's purchases of U.S. Treasury bills for reserve management have no preset path and may be adjusted based on market conditions. Speaking at a New York event, Perli noted that the FOMC has given the New York Fed discretion to adjust the scale of these purchases as needed. Currently, such purchases are at zero, but the Fed is prepared to resume them if necessary to maintain 'ample' bank reserves. Perli emphasized that the New York Fed will closely monitor senior financial officers' views and signs of funding market stress, particularly as a large net issuance of Treasury bills is expected in October. He also highlighted the benefits of central clearing for repo transactions, which could become more important if the Fed's operational framework relies more on repo tools. Earlier that day, New York Fed President John Williams noted that the transition of Treasury and repo markets to central clearing is progressing faster than planned.
Read sourceNew York Fed Official Says Monetary Policy Toolbox Working Well, T-Bill Purchases Market-Dependent
On September 23, New York Fed System Open Market Account Manager Perli stated that the Federal Reserve's monetary policy control toolbox continues to be very effective. He noted that the Fed has maintained strong interest rate control and kept reserves in ample territory, with Treasury bill purchases running smoothly. Perli indicated that the Fed's recent actions to add liquidity to the financial system, currently on hold, are not on a preset path, suggesting that the Fed may resume Treasury bill purchases if it deems it necessary to boost market liquidity. He also said that so-called reserve management purchases (RMP) of Treasury bills will be adjusted based on market liquidity needs.
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New York Fed Official Says Monetary Policy Toolbox Works Well, T-Bill Purchases Depend on Market Needs
In a statement on September 23, New York Fed System Open Market Account Manager Perli said the Federal Reserve's monetary policy control toolbox continues to function very effectively. Perli noted that the Fed has maintained strong interest rate control and kept reserves in an ample range, and that its Treasury bill purchases have been running smoothly. He indicated that the Fed's recent actions to add liquidity to the financial system, which are currently paused, are not on a preset path, suggesting the Fed may resume Treasury bill purchases if it determines that market liquidity needs a boost. Perli also stated that so-called reserve management purchases (RMP) of Treasury bills will be adjusted based on market liquidity demand.
Read sourceNew York Fed Official Says Monetary Policy Toolbox Works Well, Treasury Bill Purchases Depend on Market Needs
In a statement reported by Jin10 on September 23, New York Fed System Open Market Account Manager Perli said the Federal Reserve's monetary policy control toolbox continues to be very effective. Perli stated that the Fed has maintained very strong interest rate control and kept reserves in ample territory, with Treasury bill purchases running smoothly. He indicated that the Fed's recent actions to add liquidity to the financial system, currently on hold, are not on a preset path, suggesting the Fed may resume Treasury bill purchases if it deems market liquidity needs to be boosted. Perli also said that so-called reserve management purchases (RMP) of Treasury bills will be adjusted based on market liquidity demand.
Read sourceNew York Fed's Perli Says Reserve Purchases Flexible, Will Monitor October Treasury Issuance
Roberto Perli, manager of the System Open Market Account at the Federal Reserve Bank of New York, stated that the Fed will continue to assess reserve levels because short-term Treasury purchases are not following a predetermined path. Perli said the New York Fed will closely monitor market conditions and is prepared to adjust the size of reserve management purchases to keep reserves within an ample range. He also indicated that the New York Fed will monitor market reactions to another large net issuance of short-term Treasury securities expected in October. The remarks highlight the Fed's data-dependent approach to managing the balance sheet and money market liquidity.
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