NEW YORK (MNI) – The following text is a statement by the New York
Federal Reserve Wednesday:

On September 21, 2011, the Federal Open Market Committee (FOMC)
directed the Open Market Trading Desk (the Desk) at the Federal Reserve
Bank of New York to purchase, by the end of June 2012, $400 billion in
par value of Treasury securities with remaining maturities of 6 years to
30 years and to sell, over the same period, an equal par value of
Treasury securities with remaining maturities of 3 years or less.

The FOMC also directed the Desk to reinvest principal payments from
its holdings of agency debt and agency mortgage-backed securities (MBS)
in agency MBS.

Maturity Extension Program

Purchases of Treasury securities associated with the $400 billion
maturity extension program will be distributed across five sectors based
on the approximate weights in the following table, although this
distribution could be altered if market conditions warrant:

Nominal Coupon Securities by Maturity Range* TIPS**

6 8 Yrs 8 10 Yrs 10 20 Yrs 20 30 Yrs TIPS 6 30 Yrs

32% 32% 4% 29% 3%

*The on-the-run 10-year note will be considered part of the 8- to
10-year sector.

**TIPS weights are based on unadjusted par amounts.

Sales associated with the $400 billion maturity extension program
will take place in Treasury securities with remaining maturities of 3
months to 3 years. Roughly three quarters of System Open Market Account
(SOMA) holdings of Treasury securities in this maturity range will be
sold.

On or around the last business day of each month, the Desk will
publish a tentative schedule of operations expected to take place over
the following calendar month. The schedule will include the anticipated
total amount of purchases and sales to be conducted over the month,
operation dates, settlement dates, security types (nominal coupons or
TIPS) to be purchased or sold, the maturity date range of eligible
issues, and an expected range for the size of each operation. A schedule
of operations expected to take place in October will be released on
Friday, September 30.

Purchases and sales will be conducted with the Federal Reserves
primary dealers through a series of competitive auctions operated
through the Desks FedTrade system. Consistent with current practices,
the results of each operation will be published on the Federal Reserve
Bank of New Yorks website shortly after each operation has concluded.
In order to ensure the transparency of these operations, the Desk will
publish information on the transaction prices in individual operations
at the end of each month, coinciding with the release of the next
months schedule.

A set of Frequently Asked Questions associated with this program
will be released on Monday, September 26.

Reinvestments of Principal Payments on Agency Securities

Beginning on Monday, October 3, principal payments from holdings of
agency debt and agency MBS will be reinvested in agency MBS through
purchases in the secondary market. The current practice of reinvesting
principal payments from holdings of agency debt and agency MBS in
Treasury securities will be halted at that time. The operations
currently scheduled for September 23 and September 27 will take place as
previously announced.

Going forward, on or around the eighth business day of each month,
the Desk will publish the planned amount of purchases associated with
the reinvestment of principal payments from agency debt and agency MBS
expected to be received over the next monthly period.

Reinvestment purchases will be conducted with the Federal Reserves
primary dealers through a competitive bidding process. The results of
each weeks purchases will be published on the Federal Reserve Bank of
New Yorks website. In order to ensure the transparency of these
operations, the Desk will publish information on the transaction prices
in individual operations at the end of each monthly period, coinciding
with the release of the next periods planned purchase amount.

A set of Frequently Asked Questions associated with this program
will be released on Monday, September 26.

** Market News International New York Newsroom: 212-669-6430 **

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