Federal Reserve restarts ‘Not QE’ operations after one week

The Federal Reserve has resumed its reserve management purchases of short-term Treasury securities, restarting the program after a brief one-week pause. The operations, which market participants have affectionately dubbed “Not QE,” involve buying Treasury bills and short-maturity securities to keep the banking system’s plumbing running smoothly.

What the Fed is actually doing

The reserve management purchases, or RMPs, kicked off shortly after the Fed officially ended its quantitative tightening program on December 1, 2025. The New York Fed’s Open Market Trading Desk executes these operations, focusing exclusively on Treasury securities with remaining maturities of three years or less.

The initial pace of purchases reached as high as $40 billion per month in Treasury bills during the early months of the program. More recently, the Fed conducted approximately $10 billion in RMPs during the July 14 to August 13 window, alongside reinvestments of existing securities.

For the subsequent period running from August 14 to September 14, the Fed has planned zero new RMPs, opting instead to continue reinvestments totaling about $17 billion.

Why ‘Not QE’ matters

Traditional quantitative easing was a monetary policy tool designed to stimulate the economy. The Fed would buy long-term Treasuries and mortgage-backed securities to push down long-term interest rates, encourage borrowing, and nudge investors into riskier assets.

RMPs, by contrast, are what Fed officials describe as “plumbing” operations. Their purpose is to maintain what the central bank calls an “ample-reserves regime,” a framework established after the repo market near-crisis in September 2019 when overnight lending rates briefly spiked because reserves had become too scarce.

No emergency measures or policy-rate implications are attached to these operations, according to Fed officials. The purchases carry no indication that the central bank is shifting its stance on interest rates or attempting to loosen financial conditions.

The credibility question

The Fed used nearly identical language in October 2019 when it began purchasing $60 billion per month in Treasury bills to address the repo market disruption. Then-Chair Jerome Powell went out of his way to stress that those purchases were “in no sense” QE.

The variable pacing of purchases adds another layer of complexity. Going from $40 billion per month early in the program to $10 billion recently, and then to zero new purchases in the current window, suggests the Fed is actively managing the flow rather than committing to a fixed schedule.

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