While a pension purchase contract involves a sale of assets, it is considered a loan for tax and accounting purposes. When the desk conducts open market transactions, it sells securities held in the Open Market Account (SOMA) to eligible RRP counterparties with an asset repurchase agreement on the specified RRP due date. As a result, the soma portfolio remains of the same size, as securities sold temporarily in pension transactions continue to be accounted for as SOMA assets in accordance with generally accepted accounting standards, but the transaction defers some of the federal reserve`s debt on deposits (also known as bank reserves) to the withdrawal of deposits while the transactions are outstanding. These RRP operations may apply overnight or for a specified period of time. If interest rates are positive, the pf redemption price should be higher than the original PN selling price. Between 2008 and 2014, the Fed introduced quantitative easing (QE) to stimulate the economy. The Fed has built up reserves to buy securities, which has significantly increased its balance sheet and the supply of reserves to the banking system. As a result, the pre-crisis framework was no longer working, so the Fed moved to a “broad reserve” framework with new instruments – interest on excess reserves (IORR) and overnight deposits (ONRRP), the two interest rates that the Fed itself sets – to control its main short-term interest rate. In January 2019, the Federal Reserve`s open market committee – the Fed`s policy committee – confirmed that it “intends to continue to implement monetary policy in a regime where a sufficient reserve offer will ensure that control of the level of the Federal Funds and other short-term interest rates is primarily through the setting of interest rates managed by the Federal Reserve and in which active management of the federal reserve reserve is not necessary.” When the Fed ended its asset buyback program in 2014, the supply of excess reserves in the banking system began to shrink. When the Fed began to reduce its balance sheet in 2017, reserves fell more rapidly. A reverse repurchase agreement (RRP) is an act of buying securities with the intention of returning the same assets profitably in the future – to resell. This lawsuit is the opposite of the medal to the buyout contract.