The Fed’s Charles Plosser is now chewing the ears of reporters in New York and says he’s not “panicky” on the housing market. He also says the Fed will manage excess reserves to meet inflation goal.


  • Some models for rule-based policy suggests US short term rates should be above zero
  • Changing financial market structure means more transparency needed from Fed
  • Policy makers still mulling role of reverse repo facility for whenever Fed begins raising short term rates

The Fed is beta testing the reverse repo system as one tool to drain out liquidity.