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Powell Q&A Concludes with Question on State/Muni Debt Purchases

FED

Q: What if you buy state/muni securities directly, the way you buy MBS?

- A: We're doing that with the municipal liquidity facility now... Securities up to 3 years. As part of an emergency 13-3 facilitiy, which has to meet emergency requirements. But that's a rare thing, when regular intermediation in the capital markets or in the banking system has broken down....it shouldn't be a permanent thing where we're just another federal financing agency, like a GSE. We put those tools away after the global financial crisis and we'll do now when the time comes.

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