In May 2022, the Federal Reserve (Fed) announced that the process to reduce the size of its balance sheet would begin on June 1. With that process now underway, this post reviews the initial months of runoff. We also highlight publicly available resources that provide data to monitor the ongoing runoff of the Federal Reserve System Open Market Account (SOMA), which holds the securities acquired through open market operations.
On Thursday, April 16, New York Fed President John Williams spoke to the Economic Club of New York about how the Federal Reserve is responding to the current economic turmoil.
Last week, the Federal Open Market Committee (FOMC) announced steps to support the implementation of monetary policy. The FOMC directed the New York Fed’s Open Market Trading Desk (the Desk) to purchase Treasury bills at least into the second quarter of next year to maintain reserve balances at or above the level that prevailed in early September. It also directed us to conduct repo operations at least through January.
On Thursday, October 17, New York Fed President John Williams spoke about the Fed’s operating framework for carrying out monetary policy, the recent money market turmoil, and the path forward.
On Thursday, July 18, New York Fed President John Williams spoke at the annual meeting of the Central Bank Research Association (CEBRA) about monetary policy strategy near the zero lower bound (ZLB).
During a press conference following last week’s meeting of the Federal Open Market Committee (FOMC), Federal Reserve Chair Jerome Powell pointed out that the Fed has made “consequential decisions” about its balance sheet in recent months, including to maintain its current framework for implementing monetary policy and to slow the pace at which it allows maturing securities to run off. A speech last month by New York Fed senior vice president Lorie Logan provides helpful context around questions about balance sheet normalization and how the Fed could implement monetary policy going forward in light of these decisions by the FOMC.
Catching up on Open Market Operations? The 2018 SOMA Annual Report and New Data Interactive Has You Covered
The New York Fed today released the 2018 annual report of the System Open Market Account (SOMA). Issued to the Federal Open Market Committee (FOMC) for much of the Fed’s history, this report provides a review of open market operations conducted by the Open Market Trading Desk (the Desk), other developments that influenced the Fed’s portfolio of domestic securities, and developments in the Fed’s foreign operations. The SOMA represents the largest asset on the Fed’s balance sheet.
This morning, New York Fed EVP Simon Potter, who heads the Markets Group, spoke at a conference in Paris, France. The remarks, titled “U.S. Monetary Policy Normalization is Proceeding Smoothly,” were delivered at “Exiting Unconventional Monetary Policies,” a conference co-hosted by the Euro 50 Group, CIGI, and the China Finance 40 Forum.
On Wednesday, October 10, New York Fed President John Williams delivered keynote remarks at a conference in Indonesia. The speech, titled “Moving Toward ‘Normal’ U.S. Monetary Policy,” came at the Joint Bank Indonesia-Federal Reserve Bank of New York Central Banking Forum.