NEW YORK CITY-The Federal Reserve Bank of New York saidWednesday it’s been directed to buy an additional $600 billion oflonger-term Treasury securities by the end of the second quarter of2011. Additionally, the New York Fed will reinvest $250 billion to$300 billion of principal payments from agency debt and agencymortgage-backed securities.

Taken together, the New York Fed’s Open Market Trading Deskanticipates conducting $850 billion to $900 billion of purchases oflonger-term Treasury securities through Q2 ’11, the bank says in astatement. That will translate into an average purchase pace ofroughly $110 billion per month, including $75 billion of additionalpurchases per month and another $35 billion per month associatedwith reinvestment purchases.

The move grew out of the Federal Open Market Committee’sdecision Wednesday to expand the Fed system’s holdings ofsecurities in the System Open Market Account. The idea, accordingto the New York Fed, is “to promote a stronger pace of economicrecovery and to help ensure that inflation, over time, is at levelsconsistent with its mandate.”

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.