New York Fed unexpectedly suspends RMP bond purchases, monthly scale drops to zero, Wall Street expects it to last at least until October
On Thursday, U.S. Eastern Time, the New York Federal Reserve updated its open market operations plan, announcing that the size of its RMP (Reserve Management Purchase) operations, used to manage bank system reserves, will be reduced to zero for the one-month operation period ending September 14. This move came after market consensus had expected the monthly size to remain at $10 billion. This marks the first time the monthly purchase size of the RMP program has been reduced to zero since its inception in December 2025. Wall Street strategists from Bank of America, Wells Fargo, and TD Securities expect this pause not to be short-term, lasting at least until October, with TD Securities further projecting it could remain at zero until mid-November, potentially restarting thereafter at a scale of $5 billion to $10 billion per month. The Federal Reserve's action indicates its view that the current bank system reserve buffer is ample and financing market conditions are looser than previously anticipated, but it is not a precursor to quantitative tightening (QT).
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Disclaimer: This content reflects the author's personal views only and does not constitute investment advice.
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