10/11, 5:57 PM (Source: TeleTrader)
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Fed to buy T-bills for $60B per month

The central bank of the United States revealed on Friday the details of its plan to expand its balance sheet with short-term government debt securities, for which Federal Reserve Chairman Jerome Powell has insisted that it isn't the same as quantitative easing. In order for the supply of bank reserves to continue to be "ample," Treasury bills will be bought "at least into the second quarter" at a rate of $60 billion per month starting on October 15, according to the announcement.

The Fed noted that in January it said the control over the funds rate and other short-term borrowing costs would be conducted via administered rates and not by active management. The recent increase in nonreserve liabilities was expected, it added.

The program for term and overnight repurchase agreement operations and overnight reverse repurchase operations will be maintained at least by the end of January, the Federal Open Market Committee also said. The New York Fed is responsible for conducting them. The overnight repos are worth $75 billion per week while term repos are executed at a rate of $35 billion two times per week.

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