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Appendix 1: Materials used by Mr. Sack
September 21, 2010 129 of 151Authorized for Public Release
Material for
FOMC Presentation:Financial Market Developments and Desk Operations
Brian Sack
September 21, 2010
Class II FOMC - Restricted FR
1 of 4
September 21, 2010 130 of 151Authorized for Public Release
Class II FOMC – Restricted FR Exhibit 1
Source: Federal Reserve Board of Governors
(2) Implied Federal Funds Rate
*Change from peak in 10-year yield on 04/05/10Source: Federal Reserve Board of Governors
(4) Change in 1-Year Forward Rates*
0.0
0.5
1.0
1.5
2.0
2.5
3.0
10/01/10 04/01/11 10/01/11 04/01/12
Percent
4/5/10
8/9/10
9/17/10
(1) Treasury Yields
Source: Bloomberg
(6) Forward Inflation Compensation (5-Year Ahead 5-Year Rate)
0.0
1.0
2.0
3.0
4.0
01/01/10 03/01/10 05/01/10 07/01/10 09/01/10
Percent
2-yr 5-yr 10-yr
FOMC
Source: Federal Reserve Bank of New York
-2.0
-1.5
-1.0
-0.5
0.0
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Percent
Years Ahead
1.0
1.5
2.0
2.5
3.0
3.5
07/01/09 11/01/09 03/01/10 07/01/10
..
Percent
FOMC
(3) Probability of First Rate Hike
0
5
10
15
20
25
30
Q3 2010
Q4 2010
Q1 2011
Q2 2011
Q3 2011
Q4 2011
Q1 2012
Q2 2012
≥ Q3
2012
Percent
Source: Federal Reserve Bank of New York Policy Survey
(5) Probability of Balance Sheet Policy
0
10
20
30
40
50
60
April June August September
Percent
Balance Sheet Expansion by Year-End
Treasury Purchases over 2 Year Horizon
Source: Federal Reserve Bank of New York Policy Survey 2 of 4
September 21, 2010 131 of 151Authorized for Public Release
Class II FOMC – Restricted FR Exhibit 2
(7) US Equities
*Average 5-year bank CDSSource: Bloomberg
(11) Euro Area Sovereign Yield Spread (2-Year Spread to German Debt)
(12) Currencies
Source: Bloomberg
0
10
20
30
40
50
60
70
80
08/03/09 12/03/09 04/03/10 08/03/10
BPS
3-Month Forward SpreadSpot Spread
FOMC
(8) US Bank CDS*
(9) LIBOR-OIS Spreads (3-Month Rates)*
*Forward rates derived from FRA and OIS.Source: Bloomberg
85
90
95
100
105
110
115
120
125
08/03/09 12/03/09 04/03/10 08/03/10
Indexed to 08/03/09
Dollar-EuroDollar-Yen
Dollar Appreciation
FOMC
0
4
8
12
16
0
100
200
300
400
500
600
08/03/09 12/03/09 04/03/10 08/03/10
BPS
ItalySpain Portugal Ireland Greece (RHS)
Source: Bloomberg
Percent
FOMC
50
100
150
200
08/03/09 12/03/09 04/03/10 08/03/10
BPS
FOMC
80
90
100
110
120
130
140
08/14/09 12/14/09 04/14/10 08/14/10
Indexed to 08/14/09
S&P 500US Bank Index
FOMC
Source: Bloomberg
0
5
10
15
20
Greece Ireland Portugal Spain Italy
June 2008August 2010
(10) ECB Financing as a Percentage of Bank Liabilities
Source: ECB and national central banks
3 of 4
September 21, 2010 132 of 151Authorized for Public Release
0
5
10
15
20
25
30
35
01/01/09 10/01/09 07/01/10 04/01/11 01/01/12
Agency Debt MaturingMBS Paydown
Forecast$ Billions
Class II FOMC – Restricted FR Exhibit 3
(15) Monthly Paydowns of Agency Debt and Agency MBS
Source: Federal Reserve Bank of New York
(13) 10-Year Treasury Yield Around August FOMC Meeting
Source: Bloomberg
(14) Treasury Purchases Since August FOMC Meeting
Source: Federal Reserve Bank of New York
Source: Federal Reserve Bank of New York
(17) Percent Owned by the Federal Reserve
*Percent of total outstanding 30-year fixed MBS.**Percent of total outstanding Treasury coupon securities.Source: Federal Reserve Bank of New York
(18) Option-Adjusted MBS Spreads*
(16) Cumulative Paydowns of Agency Debt and Agency MBS
0
100
200
300
400
500
600
02/04/09 10/04/09 06/04/10 02/04/11 10/04/11
$ Billions
Agency Debt MaturingMBS Paydown
+/- 50 BP Shift
Baseline
2.5
2.6
2.7
2.8
2.9
3.0
08/01/10 08/04/10 08/09/10 08/12/10 08/17/10
Percent
FOMCAnnouncement
-50
-25
0
25
50
75
100
01/01/09 06/01/09 11/01/09 04/01/10 09/01/10
BPS
FOMC
*Series reflect current coupon spreads prior to 6/1/10 and 4.0 coupon thereafter.Source: Barclays Capital
Current Level
Over 1Year
MBS* 24% 17%
Treasuries (under reinvestment)** 12% 15%
0
2
4
6
8
10
12
14
16
1.5 to 2.5 2.5 to 4 4 to 6 6 to 10 10 to 30 TIPS
4 of 4
September 21, 2010 133 of 151Authorized for Public Release
Appendix 2: Materials used by Mr. Stockton
September 21, 2010 134 of 151Authorized for Public Release
Private Housing Construction(Thousands of units, seasonally adjusted annual rate, except where noted)
2009 2010 2010
Category 2009 Q4 Q1 Q2r June Julyp Julyr Aug.p
Total Starts 554 565 617 602 539 546 541 598 Permits 583 626 655 589 583 565 559 569
Single-family Starts 445 488 524 491 450 432 420 438 Permits 441 491 525 448 421 416 406 401 Adjusted permits1 454 504 538 461 434 420 411 404 Permits backlog2 58 58 58 49 49 48 49 48
Multifamily Starts 109 77 93 111 89 114 121 160 Permits 142 135 130 141 162 149 153 168 Adjusted permits1 143 136 130 141 162 149 153 168 Permits backlog2 40 40 42 39 39 39 38 37
Regional starts3 Northeast 62 61 69 72 60 77 74 56 Midwest 97 100 96 103 83 93 92 112 South 278 295 317 315 287 267 270 289 West 117 109 135 112 109 109 105 141
r revised p preliminary 1. Adjusted permits equal permit issuance plus total starts outside of permit-issuing areas. 2. Number outstanding at end of period. Seasonally adjusted by staff. Excludes permits that have been cancelled,abandoned, expired, or revoked. Not at an annual rate. 3. Sum of single-family and multifamily starts. Source: Census Bureau.
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011.0
.2
.4
.6
.8
1.0
1.2
1.4
1.6
1.8
2.0
.0
.2
.4
.6
.8
1.0
1.2
1.4
1.6
1.8
2.0Millions of units
Private Housing Starts and Permits(Seasonally adjusted annual rate)
Single-family starts
Single-family adjusted permits
Source: Census Bureau.
Aug.
Multifamily starts Aug.
Note. Adjusted permits equal permit issuance plus total starts outside of permit-issuing areas.
September 21, 2010 135 of 151Authorized for Public Release
Appendix 3: Materials used by Chairman Bernanke
September 21, 2010 136 of 151Authorized for Public Release
30
40
50
60
70
80
90
100
110
120
130
3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5Unemployment rate
Beveridge Curve: 1971-1978 (Quarterly Data)
Help wanted index (pct of emp)
74:Q1
72:Q1
71:Q1
77:Q1
76:Q1
78:Q1
75:Q1
73:Q1
30
40
50
60
70
80
90
100
110
120
130
3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5
Beveridge Curve: 1979-1987 (Quarterly Data)
Unemployment rate
Help wanted index (pct of emp)
82:Q183:Q1
84:Q1
86:Q4
81:Q180:Q1
85:Q179:Q1
September 21, 2010 137 of 151Authorized for Public Release
30
40
50
60
70
80
90
100
110
120
130
3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5
Beveridge Curve: 1989-1995 (Quarterly Data)
Unemployment rate
Help wanted index (pct of emp)
89:Q1
90:Q1
91:Q1 92:Q1
93:Q1
94:Q1
95:Q1
30
40
50
60
70
80
90
100
110
120
130
3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5Unemployment rate
Beveridge Curve: 1999-2006 (Quarterly Data)
Help wanted index (pct of emp)
99:Q100:Q1
01:Q1
02:Q1
03:Q104:Q1
05:Q106:Q1
September 21, 2010 138 of 151Authorized for Public Release
30
40
50
60
70
80
90
100
110
120
130
3.5 4.5 5.5 6.5 7.5 8.5 9.5 10.5
Beveridge Curve: Q12007 - Q22010HWI (pct of emp)
Unemployment rate
Q1:07
Q1:08
Q1:09
Q2:10 Q1:10
September 21, 2010 139 of 151Authorized for Public Release
Appendix 4: Materials used by Mr. English
September 21, 2010 140 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR) Material for FOMC Briefing on Monetary Policy Alternatives Bill English September 21, 2010
September 21, 2010 141 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 1 of 10
AUGUST FOMC STATEMENT
1. Information received since the Federal Open Market Committee met in June indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.
2. Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
3. The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
4. To help support the economic recovery in a context of price stability, the Committee will 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 in longer-term Treasury securities.1 The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature.
5. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
1 The Open Market Desk will issue a technical note shortly after the statement providing operational
details on how it will carry out these transactions.
September 21, 2010 142 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 2 of 10
SEPTEMBER FOMC STATEMENT—ALTERNATIVE A1
1. Information received since the Federal Open Market Committee met in JuneAugust indicatesconfirms that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing only gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however,has slowed and investment in nonresidential structures continues to be weak. and Employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.
2. Measures of underlying inflation have trended lower in recent quarters. Underlying inflation is now running below the level of 2 percent or a bit less, as measured by the price index for personal consumption expenditures, that the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. In the current environment, disinflation is an impediment to economic recovery. and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
3. To help foster a stronger pace of economic recovery and to move underlying inflation closer, over time, to rates consistent with its mandate, the Committee will increase its total holdings of securities to approximately $2.5 trillion by purchasing an additional $500 billion of longer-term Treasury securities over the next six months. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee also will maintain the target range for the federal funds rate at 0 to ¼ percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To help support the economic recovery in a context of price stability, the Committee will 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 in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature.
4. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stabilityact as needed to support a stronger economic recovery and foster price stability.
September 21, 2010 143 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 3 of 10
SEPTEMBER FOMC STATEMENT—ALTERNATIVE A2
1. Information received since the Federal Open Market Committee met in JuneAugust indicatesconfirms that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing only gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising; however,has slowed and investment in nonresidential structures continues to be weak. and Employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract. Nonetheless, The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.
2. Measures of underlying inflation have trended lower in recent quarters, to levels below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. In the current environment, disinflation is an impediment to economic recovery. and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
3. The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
4. To help foster a stronger pace of economic recovery and to move underlying inflation closer, over time, to rates consistent with its mandate, the Committee will increase its total holdings of securities to approximately $2.5 trillion by purchasing an additional $500 billion of longer-term Treasury securities over the next six months. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. To help support the economic recovery in a context of price stability, the Committee will 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 in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature.
5. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stabilityact as needed to support a stronger economic recovery and foster price stability.
— OR — 5. The Committee will continue to monitor the economic outlook and financial
developments and will employ its policy tools as necessary to promote economic recovery and price stability. The Committee will determine, each time it meets, whether an adjustment—either upward or downward—to its holdings of securities is needed to foster maximum employment and price stability.
September 21, 2010 144 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 4 of 10
SEPTEMBER FOMC STATEMENT—ALTERNATIVE B
1. Information received since the Federal Open Market Committee met in JuneAugust indicatesconfirms indicates that the pace of recovery in output and employment has slowed in recent months. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year; however, while investment in nonresidential structures continues to be weak. and Employers remain reluctant to add to payrolls. Housing starts remainare at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. Nonetheless, The Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, although the pace of economic recovery is likely to be more modest in the near term than had been anticipated.
2. Measures of underlying inflation have declined and are currently at trended lower in recent quarters, to levels somewhat below those the Committee judges most consistent, over the longer run, with its mandate to promote maximum employment and price stability. and With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to beremain subdued for some time before rising to levels the Committee considers consistent with its mandate.
3. The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee also will maintain its existing policy of reinvesting principal payments from its securities holdings.
4. To help support the economic recovery in a context of price stability, the Committee will 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 in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature.
4. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. is prepared to provide additional accommodation as needed to support the foster a stronger economic recovery and to help return inflation, over time, to levels consistent with its mandate.
September 21, 2010 145 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 5 of 10
SEPTEMBER FOMC STATEMENT—ALTERNATIVE C
1. Information received since the Federal Open Market Committee met in JuneAugust indicates that the pace of economic recovery in output and employment has slowed in recent monthsis proceeding. Household income and spending isare increasing gradually. , but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Manufacturing activity and business spending on equipment and software have risen.is rising; however, investment in nonresidential structures continues to be weak and employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract, but at a reduced rate in recent months. Measures of underlying inflation have trended lowerstayed subdued in recent quarters, and longer-term inflation expectations have remained stable. Nonetheless, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, Although the pace of economic recovery is likely to be more modest in the near term, than had been anticipated.the Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.
2. Measures of underlying inflation have trended lower in recent quarters and, with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.
2. The Committee will maintain the target range for the federal funds rate at 0 to ¼ percent and continues to anticipates that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended periodsome time. To help support the economic recovery in a context of price stability, For the time being, the Committee also will maintain its existing policy of reinvesting principal payments 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 in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature.
3. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.
September 21, 2010 146 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 6 of 10
August 2010 FOMC Directive The Federal Open Market Committee seeks monetary and financial conditions
that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to maintain the total face value of domestic securities held in the System Open Market Account at approximately $2 trillion by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.
September 21, 2010 147 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 7 of 10
September 2010 FOMC Directive — Alternative A1 The Federal Open Market Committee seeks monetary and financial conditions
that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to execute purchases of about $500 billion of longer-term Treasury securities by the end of March 2011 in order to increase the total face value of domestic securities held in the System Open Market Account to approximately $2.5 trillion. The Committee also directs the Desk to maintain the total face value of domestic securities held in the System Open Market Account at approximately $2 trillion by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.
September 21, 2010 148 of 151Authorized for Public Release
Class I FOMC – Restricted Controlled (FR)
Page 8 of 10
September 2010 FOMC Directive — Alternative A2 The Federal Open Market Committee seeks monetary and financial conditions
that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to execute purchases of about $500 billion of longer-term Treasury securities by the end of March 2011 in order to increase the total face value of domestic securities held in the System Open Market Account to approximately $2.5 trillion. The Committee also directs the Desk to maintain the total face value of domestic securities held in the System Open Market Account at approximately $2 trillion by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.
September 21, 2010 149 of 151Authorized for Public Release
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Page 9 of 10
September 2010 FOMC Directive — Alternative B The Federal Open Market Committee seeks monetary and financial conditions
that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to maintain the total face value of domestic securities held in the System Open Market Account at approximately $2 trillion by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.
September 21, 2010 150 of 151Authorized for Public Release
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Page 10 of 10
September 2010 FOMC Directive — Alternative C The Federal Open Market Committee seeks monetary and financial conditions
that will foster price stability and promote sustainable growth in output. To further its long-run objectives, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to ¼ percent. The Committee directs the Desk to maintain the total face value of domestic securities held in the System Open Market Account at approximately $2 trillion by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.
September 21, 2010 151 of 151Authorized for Public Release