NEW YORK Feb 21 Americans should tell their
central bank if they are uncomfortable with the notion of paying
banks higher interest rates on excess reserves, because that is
what the Federal Reserve is planning when it needs to reverse
its easy policies, a top Fed official said on Thursday.
The Fed's policy exit strategy is "intimately tied" to
paying banks a higher rate of interest on excess reserves
(IOER), St. Louis Fed President James Bullard told students and
professors at New York University. The Fed believes that raising
the IOER rate should dissuade banks from lending, helping to
curb inflation if needed.