NY Fed may make technical adjustment due to asset purchases, official says
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FILE PHOTO: The cornerstone for the Federal Reserve Bank of New York is pictured in the Manhattan borough of New York City, New York, U.S., October 4, 2019. REUTERS/Carlo Allegri
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(Reuters) - The Federal Reserve's ongoing asset purchases are lifting bank reserves to new highs and contributing to a new normal for money markets, a senior New York Fed official said on Thursday.
The regional Fed bank could make minor adjustments to keep those purchases proportional to the outstanding supply of Treasury coupons and Treasury Inflation-Protected Securities (TIPS), Lorie Logan, an executive vice president at the New York Fed and the manager of the System Open Market Account (SOMA), said in prepared remarks.
The U.S. central bank, which has been buying $120 billion in bonds each month to bolster the economy, could also make changes to the rate it pays on bank reserves or on reverse repurchase agreements if needed to keep its overnight benchmark interest rate within the target range, she said.
(Reporting by Jonnelle Marte; Editing by Paul Simao)
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