The New York Federal Reserve branch's Roberto Perli is manager of the Fed’s System Open Market Account SOMA). He spoke in a speech on Tuesday, saying that markets are not viewing the FOMC 50bp rate cut as an indication of stress in the economy. Reuters with the info:
- market intelligence collected by the New York Fed indicated investors "were likely to interpret a 50-basis-point cut exactly for what it was - a recalibration of the FOMC (Federal Open Market Committee) policy toward a more neutral stance that will help maintain the strength of the economy and the labor market while continuing to enable further progress on inflation,"
More at the link above.
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The Federal Reserve’s System Open Market Account (SOMA) is the central portfolio used by the Federal Reserve to conduct monetary policy. It holds the securities that the Fed buys and sells through open market operations, primarily U.S. Treasury securities, agency debt, and mortgage-backed securities. SOMA is a key tool for influencing short-term interest rates and managing the money supply. By adjusting the size and composition of this portfolio, the Fed can influence liquidity, credit conditions, and the overall stance of monetary policy in the economy.
In addition to domestic assets, SOMA also holds foreign currency assets, allowing the Fed to participate in foreign exchange markets when necessary. The New York Federal Reserve Bank manages SOMA on behalf of the entire Federal Reserve System.
New York Federal Reserve