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Authorized for public release by the FOMC Secretariat on 1/8/2021 BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM DIVISION OF MONETARY AFFAIRS FOMC SECRETARIAT Date: July 21, 2015 To: Federal Open Market Committee From: Matthew M. Luecke Subject: Reinvestments Considerations Memo and Discussion Questions Attached as background for discussion at the upcoming FOMC meeting is a memo entitled, “Reinvestments Considerations.” Please note, there will be a goround on this topic at the upcoming meeting. It would be helpful if policymakers would address the following questions during the Committee’s discussion of reinvestment policy: SOMA Reinvestment Policy Discussion Questions (1) Would you prefer to communicate the Committee’s approach to ending or beginning to phase out reinvestments by stating a calendar date, perhaps with economic conditionality, or by stating economic conditions that would make it appropriate to begin shrinking the balance sheet? a. If the Committee were to adopt a calendar-based approach, would you want to include some economic conditionality? If so, in what form? b. If the Committee were to adopt a state-dependent approach, would you prefer to link the initial change in reinvestments to a numeric value for a specific variable, or would you prefer a less specific approach? (2) Would you prefer to cease reinvestments all at once, or would you prefer to phase out reinvestments over time? a. Would you prefer taking the same approach for Treasury securities and for MBS, or should they be handled differently? b. If you prefer different treatment for Treasury securities and MBS, how should the approaches differ? Page 1 of 1
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