NY Fed official said central bank bill buying should moderate soon

Core Viewpoint - The Federal Reserve is expected to significantly slow its Treasury bill purchases starting next month, as indicated by the New York Fed's monetary policy implementation manager, Roberto Perli [1]. Group 1: Treasury Bill Purchases - The current pace of Treasury bill buying is approximately $40 billion per month, which is likely to be reduced after April 15 due to market liquidity needs and other uncertainties [2]. - The Federal Reserve initiated large-scale purchases of Treasury bills at the end of the previous year to rebuild liquidity after halting a prolonged drawdown of its balance sheet [2]. Group 2: Quantitative Tightening - The quantitative tightening (QT) process, which began in 2022, aimed to remove excessive liquidity from the financial system, resulting in a reduction of the Fed's overall holdings from around $9 trillion to under $7 trillion [3].