William Dudley, president of the New York Fed, told the American Economic Association’s annual meeting in Philadelphia:
“We still don’t have well-developed macro-models that incorporate a realistic financial sector”
“We don’t understand fully how large-scale asset purchase programs work to ease financial market conditions, there’s still a lot of debate … Is it the effect of the purchases on the portfolios of private investors, or alternatively is the major channel one of signaling?”
Also:
- the U.S. central bank could decide At a future date the Fed could decide to implement a proposed new policy tool known as a fixed-rate full-allotment reverse repo facility. The facility has been in test mode since September and is set to last until the end of January.
