Federal Reserve Participation in Public Treasury Offerings

23 Pages Posted: 16 Dec 2019

See all articles by Kenneth Garbade

Kenneth Garbade

Federal Reserve Bank of New York

Date Written: December 2019


This paper describes the evolution of Federal Reserve participation in public Treasury offerings. It covers the pre-1935 period, when the Fed participated on an equal footing with other investors in exchange offerings priced by Treasury officials, to its present-day practice of reinvesting the proceeds of maturing securities with “add-ons” priced in public auctions in which the Fed does not participate. The paper describes how the Federal Reserve System adapted its operating procedures to comply with the 1935 limitations on its Treasury purchases, how it modified its operating procedures from time to time in response to changes in Treasury funding techniques, and how the Federal Reserve and the Treasury worked together to improve the Treasury’s debt management and the Fed’s reinvestment operations.

Keywords: debt management, open market operations, auctions

JEL Classification: G28, H63, N22

Suggested Citation

Garbade, Kenneth, Federal Reserve Participation in Public Treasury Offerings (December 2019). FRB of New York Staff Report No. 906. Available at SSRN: https://ssrn.com/abstract=3503575 or http://dx.doi.org/10.2139/ssrn.3503575

Kenneth Garbade (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States

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