Yellen Says Fed Could Consider Cutting Rate on Excess Reserves

Janet Yellen, the nominee for chairman of the Federal Reserve, said policy makers in the past have weighed cutting the interest rate on excess reserves, and could again consider using the tool to provide additional stimulus.

“It certainly is a possibility,” Yellen said in response to a question during testimony today to the Senate Banking Committee. So far, U.S. central bankers have been concerned that lowering the rate would damage the functioning of the money-market, she said.

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