NY Fed Official Says Monetary Policy Toolkit Effectively Controlling Economy

Roberto Perli, manager of the New York Fed's System Open Market Account, stated that the Federal Reserve's monetary policy control toolkit is working effectively. He cited strong interest rate control and maintaining reserves within an ample range as key factors.

Perli emphasized that recent central bank actions to add liquidity to the financial system are not a preset course. This suggests that the Fed could again buy Treasury bills if needed to bolster market liquidity, which has been paused recently.

The Fed had been buying Treasury bills in large quantities since December last year to ensure firm control over the federal funds target rate range and maintain market liquidity levels. Perli stated that the New York Fed's process for forecasting reserves is robust and generally accurate.