NY Fed's Perli Says Monetary Policy Toolkit Working Well

The New York Federal Reserve's (NY Fed) monetary policy toolkit is functioning very effectively, according to Roberto Perli, a NY Fed official responsible for implementing short-term interest rate policy. In remarks made at an event held by the NY Fed on Treasury market issues, Perli stated that strong interest rate control has been maintained and reserves have remained within the ample range.

The NY Fed's System Open Market Account is managed by Perli, who leads the technical implementation of monetary policy to achieve the Fed's employment and inflation mandates. He also noted that recent central bank actions to add liquidity to the financial system are not a preset course, suggesting that the Fed could again buy Treasury bills if necessary.

In particular, regarding Reserve Management Purchases (RMPs) of Treasury bills, Perli stated that setting them at zero is no different in spirit than any other decision made since RMPs started in December last year. He emphasized that the NY Fed has a handle on the factors governing RMPs and that its process for forecasting reserves is robust and generally quite accurate.