MNI posted an exclusive interview with the Fed’s Williams. He said the Fed could do outright Treasury buys when Operation Twist ends in December.
If by then the FOMC has still not seen “substantial” and “sustained” improvements in labor market, and if the Committee is leery of buying even more mortgage backed securities, he said it may make sense for the Fed to supplement its QE3 MBS purchases with Treasuries.
Kocherlakota was also dovish yesterday.
