The Federal Reserve announced Friday that it will commence with a test used to tighten the bank's policy and withdrawing excess liquidity from markets. The Fed stated throughout the statement that the tests are a matter of prudent planning and have no implications for the near-term conduct of monetary policy.

Five auctions will be held where the first auction will be held June 14, where the Fed will offer a $1.0 billion of 14-day term deposits, the second auction will be held at June 28, offering 28-days deposits, July 12 auction will offer 84-day deposits, noting that the statement that was released by the Federal Reserve did not specify the amount or size of those auctions, moreover, the maximum interest rates that will be paid for those deposits will be the primary credit rate that currently stand at 0.75 percent.

Throughout the last FOMC Meeting, the Federal Reserve noted that it will start exiting from markets along with withdrawing excess liquidity that was pumped into the financial cycle, while pledging to preserve interest rates at low levels for Extended Period.