Federal Reserve's Williams Stands by Rate-Control Toolkit
New York Federal Reserve President John Williams defended the US central bank's monetary policy implementation system on Tuesday, saying it can be adjusted and tweaked in line with changes in financial markets.
Williams said supplying 'ample' reserves to the financial system with the current suite of tools to manage short-term interest rates has proven to be highly effective at delivering interest rate control and supporting the smooth functioning of core financial markets.
He noted that while the central bank's rate-control framework has worked well, it is not set in stone and can be adapted to changing market conditions.
'As markets evolve over time, we must ensure that policy tools are fit for purpose to carry out their necessary functions,' Williams said.