The New York Fed embarked on its first round of Treasury bill buying Wednesday aimed at expanding its overall holdings, and found no dearth of interest from banks wanting to sell securities to the central bank.

The New York Fed said it bought $7.501 billion in Treasury bills as part of its efforts to expand its balance sheet to deal with changes in the economy and the financial system’s liquidity needs. Dealers submitted $32.569 billion in offerings. There had been some worry among market participants that the Fed might not...