Fed Expected to Maintain Pace of Reserve Management Purchases

The Federal Reserve is expected to continue scheduling the next phase of Treasury bill purchases when it announces a new round of its reserve management purchase plan on Thursday. As liquidity is projected to decline in the coming months, policymakers aim to bolster reserves through these measures. Strategists at institutions such as Barclays and Deutsche Bank anticipate that, in addition to reinvesting proceeds from maturing securities, the Fed will purchase $10 billion in Treasury bills. Meanwhile, Bank of America believes the Fed may increase the scale of its reserve management purchases to $15 billion to offset potential funding pressures caused by increased supply, though it is also quite likely that the current volume will remain unchanged at least until mid-September.