WASHINGTON — The Federal Reserve is fine-tuning a strategy to reel in some of the unprecedented amount of money that’s been pumped into the economy during the recession.
The Federal Reserve Bank of New York said Monday that investors and others shouldn’t conclude anything about when the central bank will reverse course and start boosting interest rates and removing other supports to fend off inflation.
The upcoming operations will involve so-called reverse- repurchase agreements. That’s when the Fed sells securities from its portfolio with an agreement to buy them back later.
Reverse repos are one tool the Fed can use to drain some money it has plowed into the economy to ease financial troubles.
The operations will be “extremely small” and won’t affect the Fed’s key interest rate, officials said. They wouldn’t say what the amount for the operations would total.
Fed officials also said they didn’t know when the first operation would be conducted and how many there would be.
The operations don’t “represent any change in the stance of monetary policy, and no inference should be drawn about the timing of any change in the stance of monetary policy in the future,” the New York Fed said.
