Nov 23 The U.S. Federal Reserve's securities
portfolio has not reached a level where it would impede the
central bank from carrying on with its bond-buying programs,
John Williams, the president of the San Francisco Federal
Reserve Bank, has told the Wall Street Journal in an interview.
The U.S. central bank's new bond-buying program begun in
September calls for $40 billion in mortgage debt purchases per
month, to be augmented as needed, until the Fed sees a
significant improvement in labor market conditions.
"Our concern is to make sure our policies aren't creating
problems with market-functioning," Williams said in an interview
with The Wall Street Journal. ()
"In terms of how far you can go, I don't think that we're
anywhere near any kind of limit...Conceptually, you could
imagine some upper limit to this but I don't think we're getting
anywhere near it," Williams told the paper.
Williams has been a strong supporter of the U.S. central
bank's super-easy monetary policy and is a voter this year on
the Fed's policy-setting committee.
The Fed's most hawkish policymakers criticized as misguided
and risky the central bank's aggressive attempts to boost the
U.S. economic recovery.
Williams told the Journal that he wanted to keep buying both
mortgage-backed securities and longer-term Treasury securities
at the present pace into 2013.
"A decision not to continue buying long-term Treasuries when
Twist expires...would be a surprise to markets and that would be
"In my view it would push long-term rates up and cause
financial conditions to be a little less supportive of growth,"
Under Operation Twist, which expires at year end, the Fed
has been selling short-term securities to buy $45 billion in
longer-term debt every month to push down long-term borrowing