Discussion Paper
The Evolution of the Federal Reserve’s Agency MBS Holdings
Na, Dave; Newman, Ellie; Schlusche, Bernd (2024-09-20)
The Federal Reserve (Fed) utilized its balance sheet as a monetary policy tool in response to the Global Financial Crisis (GFC) and the COVID-19 pandemic, acquiring large quantities of Treasury and agency securities. In 2022, the Fed began to reduce the size of its securities portfolio held in the System Open Market Account (SOMA) by allowing securities to roll off its balance sheet in amounts up to specific monthly redemption caps for Treasury securities and agency securities.
FEDS Notes , Paper 2024-09-20-2

Discussion Paper
An Analysis of the Interest Rate Risk of the Federal Reserve’s Balance Sheet, Part 2: Projections under Alternative Interest Rate Paths
Anderson, Alyssa G.; Marks, Philippa; Na, Dave; Schlusche, Bernd; Senyuz, Zeynep (2022-07-15)
As discussed in the first note of this two-note series, net income of the Federal Reserve (Fed) and its remittances to the U.S. Treasury along with the unrealized gain or loss position of the System Open Market Account (SOMA) portfolio are affected by fluctuations in interest rates. The need for the Fed to increase the policy rate expeditiously to address the inflationary pressures is projected to result in the Fed's net income turning negative temporarily.
FEDS Notes , Paper 2022-07-15-3

Discussion Paper
The Recent Evolution of the Federal Funds Market and its Dynamics during Reductions of the Federal Reserve’s Balance Sheet
Anderson, Alyssa G.; Na, Dave (2024-07-11)
Following its May 2024 meeting, the Federal Open Market Committee (FOMC) announced that it would slow the pace of its balance sheet reduction starting in June 2024. This will allow for a more gradual transition from an abundant to ample supply of reserves. As reserves decline, conditions in money markets, including the federal (fed) funds market, will be important in judging whether the supply of reserves is approaching ample.
FEDS Notes , Paper 2024-07-11

Discussion Paper
An Analysis of the Interest Rate Risk of the Federal Reserve’s Balance Sheet, Part 1: Background and Historical Perspective
Anderson, Alyssa G.; Na, Dave; Schlusche, Bernd; Senyuz, Zeynep (2022-07-15)
As part of its implementation of monetary policy, the Federal Reserve (Fed) holds Treasury securities and agency mortgage-backed securities (MBS) in the System Open Market Account (SOMA). The market value of these securities and the Fed's income fluctuate with changes in interest rates. As such, the ongoing increases in policy rates to address inflationary pressures are expected to put downward pressure on the Fed's net income.
FEDS Notes , Paper 2022-07-15-2