Fed’s Logan speech titled “Observations on Implementing Monetary Policy in an Ample-Reserves Regime” can be read here in full:
Thank you for the kind introduction. While preparing these remarks, I learned that the Money Marketeers organization was founded by Dr. Marcus Nadler, a gifted educator who challenged market participants to deepen their understanding of the forces that move markets, and that it was born out of a popular lecture series he regularly held at NYU.
This spirit of continual learning is a core value at the Federal Reserve, and that has been particularly important in recent years as the Fed has been operating in a new monetary policy implementation regime.
- NY Fed will study money markets to see how they operate with lower level of bank reserves in the system.
- Ample reserves’ policy to keep rates stable if fed needs to supply liquidity, buy assets to support economy.
- Bank borrowing rates above interest on excess reserves does not mean reserves are not well supplied.
- U.S. bank reserves are ample, above system’s demands.
- Fed will eventually need to buy treasuries to offset decline in reserves NY fed might have to respond to unanticipated changes in reserves by conducting repo operations.