Federal Reserve Vice Chair Reaffirms Policy Tools and Balance Sheet Strategy

According to PANews, Federal Reserve Vice Chair Jefferson emphasized in a recent consensus statement that the federal funds rate remains the primary policy tool. He noted that the likelihood of reaching the effective lower bound has decreased in light of recent history. The Federal Reserve is prepared to utilize all available tools to fulfill its mission. The size of the balance sheet remains a topic of differing opinions among Federal Reserve members. However, the balance sheet continues to shrink in an orderly manner. The decision on the final level of ample reserves is made collectively by all members of the Federal Open Market Committee.