Fed to Aim for $2.65 Trillion in Domestic Securities Holdings

The Federal Reserve will aim to keep the domestic securities holdings in its System Open Market Account at about $2.654 trillion, according to a statement today from the Federal Reserve Bank of New York.

The central bank is this month completing a $600 billion bond purchase-program as scheduled and will maintain its existing policy of reinvesting principal payments from its securities holdings, the policy-setting Federal Open Market Committee said today in a statement after a two-day meeting in Washington. Fed officials said they will maintain their record monetary stimulus to support a flagging economic recovery.

The Fed’s purchases “will be allocated across maturities according to a distribution that is nearly identical to that executed under the Treasury purchase program,” according to the statement from the New York Fed, the branch of the Federal Reserve System that implements monetary policy.

When the central bank announced its second round of bond purchases in November, it said it aimed to buy assets with an average duration of between five and six years, according to a Nov. 3 statement from the New York Fed.

The Open Market Trading Desk planned to make about 86 percent of its purchases in securities maturing between 2.5 years and 10 years, the statement said. Duration, a measure of a bond’s price sensitivity to interest rate changes, generally increases with maturity.

To contact the reporter on this story: Caroline Salas Gage in New York at csalas1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz cwellisz@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.