NY Fed's Hiring Spree: What Gives?
The Federal Reserve Bank of New York is aggressively hiring traders as its seeks to manage its burgeoning securities holdings, making the central bank one of Wall Street’s most active recruiters of financial talent. The New York Fed – the arm of the US central bank that implements its monetary policy – plans to increase the staff in its markets group to 400 by the end of the year – up from 240 at the end of 2007.
The Fed is thus becoming one of Wall Street's most active recruiters of financial talent, as most of its new staff come from the private sector. In contrast, many banks, hedge funds, private equity companies and rating agencies are cutting jobs.Now you know I truly hate to wildly speculate (bah) but perhaps the NY Fed knows something we don't. The Fed has nearly exhausted its $300 billion in planned Treasury purchases and - oh, perfect timing! - with the FOMC unlikely to officially sanction additional T-bill buys (that doesn't mean they aren't still doing it as we already know), one can only wonder what they're up to over there.
The Fed has been buying fixed-income securities to kick-start the economy at such a rate that its assets have more than doubled to $2 trillion in the past year, the paper said.
"Once we started to have to implement programs that were clearly outside the traditional credit-easing tools that the Fed has used before, it became illogical to manage some of the new programs inside the current structure," Patricia Mosser, senior adviser at the Fed, told the Financial Times.
Many of the new programs "needed their own resources," Mosser added.
Their track record leaves us only slightly curious as to motive.
The Federal Reserve Bank of New York bought $2.704 billion in Treasurys on Tuesday, after a short delay in the release and closing time. Dealers submitted $11.32 billion in debt maturing between 2026 and 2039 to the Fed. When the Fed last bought from this maturity range, it purchased about $3 billion. The U.S. central bank has purchased more than $250 billion of the $300 billion in U.S. debt it promised in March to buy in an effort to keep borrowing costs, particularly for companies and homebuyers, affordable. Fed policy makers begin a two-day meeting today and analysts expect them to say on Wednesday the buyback program will expire as initially planned, probably next month. Ten-year note yields (UST10Y 3.71, -0.06, -1.62%) , which move in the opposite direction of prices, remained lower on the day. The yield fell 8 basis points to 3.70%.
Burn, baby, burn!
So, Dudley, whatcha kids doing over there huh? Care to enlighten us?