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Author:Hilton, R. Spence 

Journal Article
Open market operations during 1997
In 1997 the Trading Desk at the Federal Reserve Bank of New York managed reserve conditions with the objective of maintaining the federal funds rate around the level desired by the Federal Open Market Committee. In 1997 the portfolio of domestic securities in the System Open Market Account expanded by a record $41 billion (excluding all temporary operations), ending the year at $448 billion. Outright purchases of Treasury securities totaled $44 billion, offset to a small degree by redemptions of some Treasury and federal agency issues. The growth in the portfolio during 1997 was significantly higher than the $15 billion increase recorded in the preceding year. The Desk closely observed the behavior of the federal funds rate for any indication that the decline in operating balances associated with the spread of retail sweep programs or any other development was impeding its ability to control the funds rate or contributing to volatility in the rate. Volatility in the federal funds rate did not increase from the previous year, but it remained above the levels that had characterized earlier years.
AUTHORS: Fisher, Peter R.; Cheng, Virginia; Hilton, R. Spence; Tulpan, Ted
DATE: 1998

Journal Article
Highlights of domestic open market operations during 1998
The Trading Desk at the Federal Reserve Bank of New York uses open market operations to implement the policy directives of the Federal Open Market Committee (FOMC). The FOMC expresses its short-term objective for open market operations as a target level for the federal funds rate--the interest rate at which depository institutions lend balances at the Federal Reserve to other depository institutions. To keep the federal funds rate near the level specified by the FOMC, the Desk uses open market operations to bring the supply of balances at the Federal Reserve into line with the demand for them. In 1998, the level of balances that depository institutions were required to hold at the Federal Reserve continued to decline, to historic lows. The primary reason for this was the ongoing proliferation of retail "sweep" programs, which transfer depositors' funds from transaction accounts that are subject to reserve requirements into other deposit accounts that are not. In past years, declines in required balances had been associated with greater volatility in the federal funds rate because depository institutions have less flexibility in managing their daily balance positions. However, through the first three quarters of 1998, the funds rate behaved much as it had in 1997, even though required balances were lower. In the final quarter of 1998, funds rate volatility rose when market participants evinced greater concerns about the credit quality of their counterparties at a time of increased uncertainty in financial markets.
AUTHORS: Fisher, Peter R.; Hilton, R. Spence
DATE: 1999

Journal Article
Monetary policy and open market operations during 1994
AUTHORS: Fisher, Peter R.; Meulendyke, Ann-Marie; Hilton, R. Spence
DATE: 1995

Report
Domestic open market operations during 2000
AUTHORS: Fisher, Peter R.; Hilton, R. Spence
DATE: 2000

Report
Domestic open market operations during 1999
AUTHORS: Fisher, Peter R.; Hilton, R. Spence
DATE: 1999

Report
Domestic open market operations during 1998
AUTHORS: Hilton, R. Spence; Fisher, Peter R.
DATE: 1998

Report
Domestic open market operations during 1997
AUTHORS: Cheng, Virginia; Tulpan, Ted; Fisher, Peter R.; Hilton, R. Spence
DATE: 1997

Journal Article
The Federal Reserve's contingency financing plan for the century date change
With the approach of the new millennium last year, many market participants resolved to limit their exposure to Y2K-related risks by cutting back normal trading activities. The Federal Reserve foresaw that the widespread adoption of such a strategy could lead to serious liquidity problems in key financing markets. Consequently, the Fed undertook to create a Standby Financing Facility that would provide securities dealers with a form of backup funding and ease market anxieties about year-end credit conditions.
AUTHORS: Hilton, R. Spence; Drossos, Evangeline Sophia
DATE: 2000

Journal Article
Intraday trading in the overnight federal funds market
Transaction-level data for the federal funds market provide a rare look at the intraday behavior of trade volume and prices. An analysis of the data reveals that trade volume exhibits large swings over the course of the day while prices remain fairly stable, with rate volatility rising sharply only in the late afternoon. The analysis underscores the important role played by institutional deadlines-most notably, the close of trading-in driving movements in this market.
AUTHORS: Hilton, R. Spence; Bartolini, Leonardo; Gudell, Svenja; Schwarz, Krista B.
DATE: 2005

Journal Article
Falling reserve balances and the federal funds rate
The growth of "sweeps"--a banking practice in which depository institutions shift funds out of customer accounts subject to reserve requirements--has reduced the required balances held by banks in their accounts at the Federal Reserve. This development could lead to greater volatility in the federal funds rate as banks try to manage their accounts with very low balances. An analysis of the evidence suggests that the volatility of the funds rate is rising slightly, but not enough to disrupt the federal funds market or affect the implementation of monetary policy.
AUTHORS: Hilton, R. Spence; Bennett, Paul
DATE: 1997

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