Minutes of the Federal Open Market Committee – April 28-29, 2015

“Developments in Financial Markets and the Federal Reserve’s Balance Sheet – In a joint session of the Federal Open Market Committee (FOMC) and the Board of Governors of the Federal Reserve System, the manager of the System Open Market Account (SOMA) reported on developments in domestic and foreign financial markets. The deputy manager followed with a review of System open market operations conducted during the period since the Committee met on March 17-18, 2015. The deputy manager also discussed the outcomes of continued testing of the Federal Reserve’s term and overnight reverse repurchase agreement operations (term RRP operations and ON RRP operations, respectively). The Open Market Desk conducted two term RRP operations over the March quarter-end. The combination of term and ON RRP operations continued to provide a soft floor for money market rates over the intermeeting period, including around quarter-end. Based on experience around recent quarter-ends, the deputy manager discussed possible plans for June test RRP operations. The manager summarized ongoing staff work related to improved data collection for, and possible adjustments to, the calculation of the effective federal funds rate that were intended to provide a more robust measure of trading conditions in the federal funds market over time.The Committee voted to renew the reciprocal currency arrangements with the Bank of Canada and the Bank of Mexico; these arrangements are associated with the Federal Reserve’s participation in the North American Framework Agreement of 1994. In addition, the Committee voted to renew the dollar and foreign currency liquidity swap arrangements with the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, and the Swiss National Bank. The votes to renew the Federal Reserve’s participation in these standing arrangements are taken annually at the April meeting. Mr. Lacker dissented on both votes because of his opposition, as indicated at the January meeting, to foreign exchange market intervention by the Federal Reserve, which such swap arrangements might facilitate, and because, in his view, such arrangements were best left to fiscal authorities.”