U.S. Treasury and Federal Reserve execute liquidity management operations

The U.S. Treasury and the Federal Reserve are conducting targeted operations to manage market liquidity and debt composition. On September 10, the Treasury completed its first operation under an expanded program, purchasing $5.187 billion in long-dated government bonds. This buyback targeted off-the-run securities—older issues that trade less frequently—to improve liquidity in those markets. The Treasury acted as a price-sensitive buyer, accepting 23 of 40 eligible issues maturing between 2037 and 2046.

Separately, the Federal Reserve is winding down its Reserve Management Purchase (RMP) program. On August 26, the central bank accepted $2.12 billion in Treasury bills, representing approximately 9.6% of the $22 billion submitted by dealers. These technical purchases are designed to maintain ample reserves in the banking system to ensure short-term interest rates remain within the Fed’s target range. The RMP program, which began in December 2025, has seen its monthly pace decrease from $40 billion to $10 billion as the central bank approaches a planned pause in operations.