Q&A continues: - Q: Fed has systematically......>

FED: Q&A continues:

- Q: Fed has systematically been overestimating NAIRU? Looking at employment

side of the mandate in framework review?

A: Focus is on how to use tools/strategies/tools on both sides of the mandate.

Over years we've been learning that NAIRU is lower. That's a good thing, we

don't have to worry so much about inflation, you see the benefits of that in the

labor market.

- Q: What are you doing beyond TOMOs? Telling examiners not preferring reserves

over Tsys? Talking to Tsy about volatility in account at the Fed? Standing repo?

A: On Tsys vs Reserves, banks are all over the place on the composition of their

buffers. In terms of Tsy General Acct, tried not to pull TGA into this, have

treated it as exogenous, want Tsy to have the cash it needs. Re Standing Repo,

we are more focused on bill purchases, year end, supervisory and regulatory

issues which are structural things. Have to allow liquidity that is already

there to flow more free. Going through year-end through OMOs, purchases and term

repo.