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The net bond purchases would be the next, long-planned phase of the Fed’s approach to matching the levels of cash-like assets available to banks to their needs—not a new effort to stimulate the economy.

He added that recent volatility in repo markets shows that reserves—a highly liquid asset that banks trade among themselves—have been falling close to levels that match banks’ needs, a sign that a modest level of Fed bond purchases will soon be needed to keep overnight lending markets supplied at appropriate levels.

The bond purchases are part of a plan that Fed officials have previously telegraphed, and will “in no way represent a change in the underlying stance of monetary policy,” Williams said, according to a published text of his remarks.

Williams pointed to a stretch of increased pressure in repo rates as a sign that the overnight lending markets at the heart of the financial system are no longer awash in much excess cash.

“Based on recent sustained repo market pressures and other growing signs of reserves moving from abundant to ample, I expect that it will not be long before we reach ample reserves,” Williams said, referring to the trigger for the Fed to resume net purchases.