Federal Reserve pauses Reserve Management Purchases after tapering to $10bn monthly, citing stable money markets and ample reserves.
The Federal Reserve has paused its Reserve Management Purchases (RMP) after reducing monthly purchases from $40bn to $10bn. The decision reflects stable money market rates and a sufficient reserve buffer, rather than an imminent shift to Quantitative Tightening (QT).
Analysts note the pause is temporary, with RMP expected to resume at a $5-10bn monthly pace in November 2026. QT is not anticipated before 2027, as the Fed prioritizes maintaining market stability ahead of year-end liquidity needs.
The Fed’s current instructions still direct the New York Fed to increase System Open Market Account holdings through Treasury bill purchases, signaling no near-term balance sheet reduction.