[Wall Street Expects Fed to Pause Reserve Management Purchases This Month, May Resume in October] BlockBeats News, September 15 — According to the latest announcement from the Federal Reserve, the Fed has extended the suspension of Reserve Management Purchases (RMP) until mid-October, meaning it will not purchase U.S. Treasury securities for the purpose of managing bank system reserves during this period. This move indicates that the Fed currently believes the level of reserves in the banking system remains relatively ample. Market analysts believe the suspension of RMP reflects the Fed's confidence in the functioning of the short-term funding market. Recently, the Secured Overnight Financing Rate (SOFR) has mostly stayed near or below the interest rate on reserve balances, and factors such as the Treasury's repayment of Treasury bills ahead of the quarterly tax deadline have also helped alleviate pressure in the funding market. Strategists from Wells Fargo and Bank of America expect the Fed to maintain zero RMP purchases this month and potentially resume in mid-October to address potential pressures in the funding market following increased Treasury issuance. Barclays strategist Samuel Earl predicts that the Fed's RMP purchases will resume at a scale of $10 billion in October and further increase to $20 billion in November. Meanwhile, Citigroup strategists believe the Fed may continue to suspend RMP for the remainder of the year, noting that the banking system's reserve balances have fallen to a "slightly ample" level. The suspension of RMP does not signify a fundamental shift in the Fed's monetary policy stance or balance sheet strategy. [Original Link]