Williams stated that the process of central clearing for U.S. Treasury and repo is advancing ahead of schedule.

New York Federal Reserve President Williams stated that the process of shifting U.S. Treasury bonds and repurchase agreements collateralized by U.S. Treasuries to central clearing has advanced ahead of schedule. Williams said, “In response to upcoming deadlines, the industry has begun expanding infrastructure for clearing repo and spot transactions, and related trading activity has shifted in advance from uncleared markets to cleared markets.” This process requires that eligible secondary market transactions (including U.S. Treasuries, repo agreements, and reverse repo agreements) must be cleared through a central counterparty. Williams reiterated that the Federal Reserve currently maintains an “ample” reserves framework for banks, which has proven to be “very effective” in ensuring that market rates stay within the Federal Reserve’s target range for the federal funds rate and in supporting financial market operations. He stated that the Federal Reserve is committed to maintaining flexibility in the supply of bank reserves.