Fed's Waller: Fed has tools available to mitigate unanticipated market disturbances

Source Fxstreet

Federal Reserve Governor Christopher Waller said on Friday that he preferred to continue the current pace of balance sheet decline at this week's meeting, per Reuters.

Key takeaways

"Slowing or stopping run off will be appropriate as we get closer to an ample level of reserves."

"In my view, we are not there yet because reserve balances stand at over $3 trillion and this level is abundant."

"No evidence from money market indicators or my conversations that banking system is getting close to an ample level of reserves."

"I believe the slowed run-off pace beginning in June 2024 continues to be the right one."

"Fed has tools available to mitigate unanticipated market disturbances and should rely on these and develop a plan to respond to any short-run strains."

"Even with the new slower pace of run off, a plan is still needed."

Market reaction

The US Dollar Index showed no immediate reaction to these comments and was last seen rising 0.2% on the day at 103.98.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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