MNI BRIEF: NY Fed Tool Indicates Reserves Remain Abundant

MNI (WASHINGTON) - The first estimates of a new tool from the New York Fed indicate that reserves in the banking system remain abundant, suggesting the U.S. central bank's 2-year-old quantitative tightening program has room to run.

"Our most recent estimates suggest that, although reserves have declined by over USD1 trillion since their peak of USD4.2 trillion in November 2021, they remain abundant," authors John Williams, Gara Afonso, Domenico Giannone, and Gabriele La Spada wrote in a new blog. Williams is president of the New York Fed and the co-authors are current and former staff economists.