Year-End Funding Strains Prompt Market Calls for Fed Purchases

Wall Street banks are bracing for money market pressures to rise as the year end is approaching, which analysts say may prompt the Federal Reserve to weigh steps to rebuild liquidity buffers in the $12.6 trillion market.

Central bank policymakers are meeting this week for the first time since the Fed stopped shrinking its holdings, a process known as quantitative tightening, amid signs that reserves in the banking system were no longer abundant.

The Fed has yet to address its post-balance sheet unwind policy, including the composition of its Treasury portfolio. But as funding costs have remained elevated, ...