It’s about price, not quantity.
CB’s don’t alter net reserve positions – they ‘offset operating factors’ and set interest rates.
Fed to redeem $14.02 bln of bill holdings Dec. 27
Thu Dec 20, 2007 11:20am EST
NEW YORK, Dec 20 (Reuters) – The U.S. Federal Reserve said on Thursday it will redeem the full amount of maturing Treasury bill holdings, amounting to $14.02 billion on Dec. 27.
The redemption, a move to drain liquidity from the banking system, will take place via the Federal Reserve’s System Open Market Account or SOMA.
“The Federal Reserve Open Market Trading Desk will continue to evaluate the need for the use of other tools, including further
Treasury bill redemptions, reverse repurchase agreements and Treasury bill sales,” the Fed said in a statement on the New York Fed’s Web site. (Reporting by John Parry; Editing by James Dalgleish)