(Reuters) - The U.S. central bank is launching a program that will tilt its $2.85 trillion balance sheet more heavily toward longer-term securities, in an effort to boost a fragile economic recovery.
The Federal Reserve said on Wednesday it plans to buy $400 billion in Treasuries with remaining maturities of 6 to 30 years by June 2012, and sell an equal amount of Treasuries with maturities of 3 years and less.
The Fed will also reinvest principal payments from its agency debt and agency mortgage-backed securities holdings into agency MBS starting October 3.
The following is how much, and where, the Fed plans to buy -- though it notes this could change depending on market conditions:
* 32 percent of six to eight year maturity range
* 32 percent of eight to 10 year maturity range
* Four percent of 10 to 20 year maturity range
* 29 percent of 20-30 year maturity range
* Three percent of TIPS (6-30 years)
At the same time, the Fed plans to sell roughly three quarters of its holdings of Treasury securities with remaining maturities between 3 months and 3 years.