The Fed will suspend the purchase of United States Treasury bonds for reserve management purposes for the next month

ON THURSDAY, 14 AUGUST, THE FEDERAL RESERVE INDICATED THAT IT WOULD NOT BUY UNITED STATES TREASURY BILLS FOR RESERVE MANAGEMENT PURPOSES FOR SOME TIME TO COME, INDICATING THAT POLICYMAKERS CONSIDERED BANK RESERVES IN THE FINANCIAL SYSTEM TO BE AT A DESIRABLE LEVEL. ACCORDING TO THE FEDERAL RESERVE WEBSITE IN NEW YORK, THE FEDERAL RESERVE OPEN MARKET OPERATIONS IN NEW YORK DID NOT PLAN TO UNDERTAKE RESERVE MANAGEMENT PURCHASES (RMPS) DURING ITS MONTHLY OPERATING PERIOD AS OF 14 SEPTEMBER, BUT STILL PLANNED TO REINVEST APPROXIMATELY $17 BILLION DURING THAT PERIOD. THIS SUSPENSION SHOWS THAT, DESPITE THE POTENTIAL FOR MARKET LIQUIDITY TO BE DRAWN FROM THE INCREASE IN GOVERNMENT CASH BALANCES, THE MONETARY AUTHORITIES ARE CONFIDENT THAT THE FINANCING MARKET WILL OPERATE SMOOTHLY。