What is the activity level of the open market trading by the Federal Reserve Bank of New York?

Answer 1

The New York Federal Reserve's (Fed) open market operations can be described as temporary or permanent. Temporary operations are conducted to adjust bank reserves based on short term financial factors. Permanent operations relate to long term economic needs such as the amount of currency in circulation. The Fed greatly expanded its balance sheet by conducting quantitative easing (QE) to loosen credit conditions in the wake of the financial crisis. The open market operations to conduct QE, also known as large-scale asset purchase programs, have greatly expanded the Federal Reserve's balance sheet. In 2008 the Fed's balance sheet was only about half a trillion dollars. After conducting various QE programs the Fed's balance sheet ballooned to a current balance of about $4.4 trillion.


For the most part the Federal Reserve Bank of New York engages in open market transactions on a daily basis. The purpose of most of these transactions are to keep various market factors from introducing independent shifts in bank reserves positions that are inconsistent with the current goals of Federal Reserve policies or that may lead to larger and perhaps destabilizing daily fluctuations in money market conditions. Since the NY Fed has almost unlimited leverage in its operations, foreknowledge of the Feds intentions can reap large profits. This however is a risky proposition in that any unusual market changes are carefully monitored and would be considered as inside trading, subject to legal actions.

Answer 2

The New York Federal Reserve's (Fed) open market operations can be described as temporary or permanent. Temporary operations are conducted to adjust bank reserves based on short term financial factors. Permanent operations relate to long term economic needs such as the amount of currency in circulation. The Fed greatly expanded its balance sheet by conducting quantitative easing (QE) to loosen credit conditions in the wake of the financial crisis. The open market operations to conduct QE, also known as large-scale asset purchase programs, have greatly expanded the Federal Reserve's balance sheet. In 2008 the Fed's balance sheet was only about half a trillion dollars. After conducting various QE programs the Fed's balance sheet ballooned to a current balance of about $4.4 trillion.

Answer 3

For the most part the Federal Reserve Bank of New York engages in open market transactions on a daily basis. The purpose of most of these transactions are to keep various market factors from introducing independent shifts in bank reserves positions that are inconsistent with the current goals of Federal Reserve policies or that may lead to larger and perhaps destabilizing daily fluctuations in money market conditions. Since the NY Fed has almost unlimited leverage in its operations, foreknowledge of the Feds intentions can reap large profits. This however is a risky proposition in that any unusual market changes are carefully monitored and would be considered as inside trading, subject to legal actions.