Statement Regarding Reserve Management Purchases Operations

On Dec. 10, 2025 the FOMC directed the New York Fed's Open Market Trading Desk to increase SOMA securities holdings via reserve management purchases (RMPs) in the secondary market—primarily Treasury bills, or if needed Treasuries with ≤3 years remaining—to maintain an ample level of reserves and accommodate trend growth and seasonal swings in Fed liabilities. Monthly RMP amounts will be announced around the ninth business day with the first schedule due Dec. 11 calling for roughly $40 billion of Treasury-bill purchases beginning Dec. 12; the Desk expects an elevated purchase pace for a few months to offset expected large increases in non-reserve liabilities in April, then a significant slowdown, with amounts adjusted as conditions warrant. The Desk will also reinvest agency principal into T-bills and will distribute monthly secondary-market purchases across two T-bill sectors using sector weights based on 12-month average outstanding amounts measured at end-September 2025, increasing sustained Fed demand for short-term Treasuries and supporting reserve and money-market liquidity.

Analysis

On December 10, 2025 the FOMC directed the New York Fed's Open Market Trading Desk to raise SOMA securities holdings via reserve management purchases (RMPs) primarily in Treasury bills—or Treasuries with remaining maturities of three years or less—to maintain an ample level of reserves. The Desk will announce monthly RMP amounts around the ninth business day with the first schedule due December 11 calling for approximately $40 billion of T‑bill purchases beginning December 12, 2025.

The statement says RMPs will be sized to accommodate projected trend growth in demand for Federal Reserve liabilities and seasonal swings (notably tax‑driven timing), and that the pace is expected to remain elevated for a few months to offset anticipated large increases in non‑reserve liabilities in April before a significant slowdown. The Desk also will reinvest all agency principal into T‑bills and distribute purchases across two T‑bill sectors using sector weights based on the 12‑month average outstanding measured at end‑September 2025.

The program increases persistent Fed demand for the short end of the Treasury curve, supporting T‑bill prices and money‑market liquidity and exerting downward pressure on short yields and term premia in affected sectors. Key execution risks are timing and size changes: purchase amounts will be adjusted as conditions warrant and monthly schedules are the primary signal for market participants to reprice supply/demand in specific T‑bill sectors.

Key Decisions for Investors

• Increase tactical exposure to T‑bills and ultra‑short government money‑market instruments to capture likely price support from the announced ~$40 billion initial RMPs starting Dec. 12, 2025, while avoiding material extension beyond the three‑year horizon
• Monitor the monthly RMP schedule (announced around the ninth business day) and the April liquidity calendar closely and be prepared to trim short‑term positions if the Desk signals a rapid slowdown in purchases after the initial elevated period
• Consider sector‑level positioning or relative‑value trades across the two T‑bill sectors given that purchase allocations will follow 12‑month average sector weights measured at end‑September 2025, and hedge if reinvestment flows into T‑bills accelerate unexpectedly