Potter: Fed May Have to Ramp Up Reverse Repos at Liftoff
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The Federal Reserve may have to do a lot more trading with money-market mutual funds than it does now to raise interest rates when the time comes, said Federal Reserve Bank of New York Executive Vice President Simon Potter.
The amount of borrowing it does from those funds “could conceivably be much greater than what we have seen at higher levels of interest rates,” Potter, who runs the team responsible for the implementation of U.S. monetary policy, said Wednesday in remarks prepared for delivery in New York.