A Federal Reserve Bank of New York official involved in implementing monetary policy cautioned against reading too much into language in last week’s Federal Open Market Committee meeting that addressed how the central bank manages its expansive balance sheet.
FOMC Language Clarified
The document, released on June 17 when the FOMC met for the first time under new Chairman Kevin Warsh, noted: “The Committee reaffirmed its policy of maintaining ample reserves in the banking system.” Warsh has been a deep skeptic of Fed asset-buying policies.
Dina Marchioni, director of money markets for the New York Fed, said of the FOMC statement: “I didn’t interpret it as having really a big change in what the direction was to the Desk.” Regarding the new wording, Marchioni added, “You could say this is clean-up language,” and officials still have “lots of flexibility” to tweak the pace of Treasury bill buying to deal with market liquidity conditions.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
