EDEN PRAIRIE, Minn. Jan 16 The U.S. central
bank's large portfolio of assets, not its monthly asset
purchases, are what push down borrowing costs, a top Federal
Reserve official said on Wednesday..
"What's important is not our flow of purchases, but rather
the stock of assets that we are holding," Minneapolis Federal
Reserve Bank President Narayana Kocherlakota said after
delivering a speech at a suburban Minneapolis golf course. "We
could stop buying, and we would still be putting downward
pressure on interest rates."
Kocherlakota repeated remarks from Tuesday in which he
called for the Fed to extend its pledge to keep rates low until
the unemployment rate drops to 6.5 percent, arguing that using a
5.5 percent threshold would put the economy back on track more