Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Fed should look at how to efficiently support markets in times of stress -Bowman

Published 03/03/2023, 03:02 PM
Updated 03/03/2023, 03:06 PM
© Reuters. FILE PHOTO: U.S. Federal Reserve Governor Michelle Bowman poses at a conference on monetary policy at The Hoover Institution in Palo Alto, California, U.S., May 3, 2019.   REUTES/Ann Saphir/File Photo

© Reuters. FILE PHOTO: U.S. Federal Reserve Governor Michelle Bowman poses at a conference on monetary policy at The Hoover Institution in Palo Alto, California, U.S., May 3, 2019. REUTES/Ann Saphir/File Photo

(Reuters) - The Federal Reserve should consider how to most efficiently support financial markets in times of strained liquidity using information it has gleaned from its interventions at the onset of the COVID-19 pandemic, Fed Governor Michelle Bowman said on Friday.

The U.S. central bank should explore how "to minimize the Fed's footprint and amount of asset purchases needed to restore market functioning" in times of severe stress, Bowman said in prepared remarks at a conference organized by the University of Chicago Booth School of Business at which she was moderating a panel on market dysfunction in global financial markets.

© Reuters. FILE PHOTO: U.S. Federal Reserve Governor Michelle Bowman poses at a conference on monetary policy at The Hoover Institution in Palo Alto, California, U.S., May 3, 2019.   REUTES/Ann Saphir/File Photo

Bowman did not comment on her outlook for the U.S. economy or monetary policy in her brief speech.

The Fed's targeted purchase of affected assets to quickly support financial market functioning, as occurred in Treasury markets in the spring of 2020, also meant "a key issue for central banks to consider is how to clearly distinguish asset purchases from the central bank’s monetary policy actions," Bowman added, as well as how to communicate an exit strategy to reduce the resulting enlarged balance sheet over time.

Latest comments

Whatever it takes, more tools in the toolbox, the new normal - the Federal Reserve believed they could reinvent the wheel. Now reckoning at a snail's pace that efficiency and an exit strategy were needed after all.
My love
Send my greetings to me and tell them God take care of you
We are blessed. Thank you for reminding me. ✨✨
so much for a free market.what she really means is the fed will look in to ways to give the 1% billions in times when the rest of the country Is strugging but don't worry we're still living in a free market capitalist society
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.