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MNI: Fed's Perli Expects Policy Rate To Remain Well-Controlled

Roberto Perli heads the New York Fed's markets team.

MNI (WASHINGTON) - The official responsible for managing the Federal Reserve’s massive holdings of cash and bonds said Tuesday the most recent quarter-end saw elevated volatility that bears watching, but does not suggest anything other than abundant reserves in the financial system and room to run in shrinking the central bank balance sheet.

"There is considerable evidence that reserve supply remains abundant - quarter-end pressures do not appear to be induced by a scarcity of reserves," said System Open Market Account manager Roberto Perli in prepared remarks. The effective fed funds rate "has remained very stable relative to administered rates with no sign of upward pressure, even as Treasury repo rates have moved higher." 

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MNI (WASHINGTON) - The official responsible for managing the Federal Reserve’s massive holdings of cash and bonds said Tuesday the most recent quarter-end saw elevated volatility that bears watching, but does not suggest anything other than abundant reserves in the financial system and room to run in shrinking the central bank balance sheet.

"There is considerable evidence that reserve supply remains abundant - quarter-end pressures do not appear to be induced by a scarcity of reserves," said System Open Market Account manager Roberto Perli in prepared remarks. The effective fed funds rate "has remained very stable relative to administered rates with no sign of upward pressure, even as Treasury repo rates have moved higher." 

Keep reading...Show less