Thursday, May 28, 2009

The Federal Reserve's Open Market Operations

As recently many questions have arisen as to the involvement of the Federal Reserve in bond (and other) markets, I present the data provided by the Federal Reserve of New York regarding the Fed's Open Market Operations. The charts below summarize the individual (single-serving if you will) and cumulative purchases across both Treasuries and Agencies. In a nutshell, for 2009, the Fed has purchased $131 billion Treasuries and $63.8 billion Agencies.

Now if only the Fed would follow in Japan's example and disclose its equity market purchases, there would be no more hard feelings.

Reader Mike points out that these are, in fact, merely agency bullet debentures. These do not include the hundreds of billions of MBS purchased recently, including the $25 billion BMS bought this week.

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