Economics
Balance Sheet Could Be in Regular Fed Toolkit, Daly Suggests
- San Francisco Fed chief says possibility is being debated
- Fed used bond buying in crisis, aftermath as rates hit zero
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Federal Reserve Bank of San Francisco President Mary Daly suggested that the central bank could decide to use its balance sheet as a routine part of how it guides the economy, not just as a last-ditch measure to deploy in emergencies.
“An important question is, should those always be in the toolkit?” Daly said of post-crisis bond-buying programs, popularly called quantitative easing, or QE. “Should you always have those at your ready, or should you think about, those are only tools you use when you really hit the zero lower bound and you have no other things you can do?”