March 3 (Reuters) – The Federal Reserve ought to think about learn how to most effectively assist monetary markets in occasions of strained liquidity utilizing data it has gleaned from its interventions on the onset of the COVID-19 pandemic, Fed Governor Michelle Bowman mentioned on Friday.
The U.S. central financial institution ought to discover how “to attenuate the Fed’s footprint and quantity of asset purchases wanted to revive market functioning” in occasions of extreme stress, Bowman mentioned in ready remarks at a convention organized by the College of Chicago Sales space College of Enterprise at which she was moderating a panel on market dysfunction in international monetary markets.
Bowman didn’t touch upon her outlook for the U.S. financial system or financial coverage in her transient speech.
The Fed’s focused buy of affected property to rapidly assist monetary market functioning, as occurred in Treasury markets within the spring of 2020, additionally meant “a key concern for central banks to think about is learn how to clearly distinguish asset purchases from the central financial institution’s financial coverage actions,” Bowman added, in addition to learn how to talk an exit technique to cut back the ensuing enlarged stability sheet over time.
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Reporting by Lindsay Dunsmuir; Modifying by Andrea Ricci
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