MNI INTERVIEW: Fed Needs to Pull Out All Stops: McAndrews

By Jean Yung

     WASHINGTON (MNI) - Jamie McAndrews, a former senior official at the New

York Fed, on Thursday urged the Fed to pull out all the stops to keep credit

flowing and support the economy hard hit by coronavirus. 

     He welcomed the Fed's announcement about injecting USD1.5 trillion of

liquidity into the bond market, and called for even lower rates and re-launching

crisis-era programs like the Commercial Paper Funding Facility and Term Asset

Facility. 

     "The flow of credit is one of the necessary elements to maintain

consumption, and without that flow of credit, we will run into an even faster

shutdown in consumption," McAndrews told MNI.

     Lending programs would go a long way to aid distressed corporate credit

markets and strains on various institutions and businesses, problems which will

worsen as the outbreak further shuts down activity, he said. 

     "There's also a good case for a broader asset purchase program right now

just to preserve market functioning," he said.  

     "There is some further room for rate cuts, and we should use all the

ammunition we have to address the economic slowdown that is upon us." 

     The New York Fed has boosted the size of its repo operations this week. On

Thursday, it said it would conduct three new repo auctions this week, including

two USD500 billion offerings with three-month terms and one with a one-month

term.

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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