Stimulus.org - Other

Reverse Repurchase Agreement Program

Jason Peuquet — Tue, 09 Mar 2010 22:07:30 +0000

Date:

March 8, 2010

Policy Area:

Financial Sector Policy

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Action Type:

Other

Maximum Amount Special Symbol:

Amount Spent:

The New York Federal Reserve announced a new Reverse Repurchase Agreement Program to reduce some of the liquidity in financial markets. Under the program, the Fed will sell securities from it's portfolio with agreements to repurchase them at later dates. This is an additional sign of tightening from the Fed, in light of last month's increase in the discount rate from 0.5 to 0.75 percent.

The New York Fed originally announced this program in October 2009 in an operating policy statement, stating that they had been working internally on the operational details of repurcahses and reverse repurchases to make it a viable option for draining excess liquidity if the FOMC decided such a program should be used. In the statement, the Fed also announced that reverse repos are nothing new and have even "been in the Federal Reserve's toolkit for years, and the Federal Reserve has conducted them both as recently as December 2008."

Even though this can be interpretted as a method of tightening, the Fed's statement yesterday maintained that the announcement of this program should affect expectations on other monetary policy moves.

Source:

New York Fed Operating Policy Statement 10/19/2009

New York Fed Operating Policy Statement 3/8/2010

Notes:

Is not a top-level node

Purchase of Long-Term Treasury Bonds

Maya MacGuineas — Fri, 10 Jul 2009 19:22:13 +0000

Purchase of Long-Term Treasury Securities

Date:

March 18, 2009

Policy Area:

Monetary Policy

Economic Target:

Government and GSEs

Action Type:

Other

Amount Spent:

1327687000000

On 3/19/2009 The Federal Open Market Committee announced that the Fed would purchase up to $300 billion in "longer term" Treasury securities. This would have the effect of driving down interest rates on these securities and various types of loans.

This action was taken in conjunction with the Fed's decision to increase its purchase of federal agency debt and mortgage-backed securites.

On 8/10/2010, the FOMC announced that it would take the proceeds from maturing agency debt and mortgage-backed securities and invest them in long-term Treasury bonds. The move would keep the balance sheet constant, rather than having it shrink as previously expected.

On 11/3/2010, the FOMC announced that it would make an additional purchase of $600 billion in longer-term Treasury securities, on top of the commitment made back in August. The two moves combined would result in the purchase of about $900 billion by the end of the second quarter of 2011.

Source:

Federal Reserve Open Market Committee Announcement 3/18/2009

Notes:

Maximum amount is currently unknown. Amount spent as of 1/23/2013 (http://www.clevelandfed.org/research/data/credit_easing/index.cfm). Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.

Is not a top-level node

Supplemental Financing Program to Federal Reserve

suggp — Fri, 10 Jul 2009 18:37:13 +0000

Supplemental Financing Program

Date:

September 17, 2008

Who:

Treasury

Policy Area:

Monetary Policy

Economic Target:

Government and GSEs

Action Type:

Other

Maximum Amount Special Symbol:

Amount Spent:

5000000000

At the request of the Federal Reserve, The Treasury will market a separate, new line of Treasury bills (short term securities) to help fund the Federal Reserve's actions taken in response to the economic and financial crisis.

In a release on 2/23/2010, the Treasury announced that the Treasury will increase the balance of the program from the current $5 billion to $200 billion, a level maintained between February and September 2009.

Source:

Monthly Treasury Statement for March 2009

Treasury Release 2/23/2010

Treasury Release 9/17/2008

Notes:

Maximum amount is unlimited. Amount spent reflects value of bills outstanding as of 2/17/2010. Deficit impact unknown.

Is not a top-level node

US Central Federal Credit Union Capital Injection

suggp — Fri, 10 Jul 2009 18:25:57 +0000

Date:

January 28, 2009

Policy Area:

Financial Sector Policy

Economic Target:

Financial Institutions

Action Type:

Other

Maximum Amount:

1000000000

Amount Spent:

1000000000

Amount Spent Special Symbol:

The National Credit Union Administration provided the U.S. Central Federal Credit Union with a $1 billion capital note to help cover anticipated losses on mortgage and asset-backed securities. Funds for the note were obtained from the agency's National Credit Union Share Insurance Fund.

Source:

NCUA Capital Stabilization Program

Notes:

Deficit impact currently unknown, although regulators have stated they will increase insurance fees to cover the note's cost.

Is not a top-level node