Fed Pauses Reserve Purchases Amid Ample Reserves
The Federal Reserve's System Open Market Account (SOMA) has paused its reserve management purchases due to signals of ample reserves in money markets. Roberto Perli, manager of SOMA, made this announcement at the 2026 U.S. Treasury Market Conference.
Perli stated that reserve demand was little changed over time, but their forecast for reserve supply did change materially after updating it to reflect Treasury's guidance on the end-of-December level of the Treasury General Account, which was lower than previously assumed. This led to a shift in their estimate for the supply of reserves.
The upward revision to reserve supply combined with a low likelihood of large swings in that supply limited the risks that reserves might fall below ample levels later in their forecast horizon. Perli added that various signals from money markets confirmed that reserves were ample and likely to remain so in the near term.