| PORTLAND, Ore.
PORTLAND, Ore. May 16 The Federal Reserve's
purchases of mortgage-backed securities are delivering a bigger
kick to the U.S. economy than the central bank's purchases of
Treasuries, a top Fed official said on Thursday.
The comments, from San Francisco Federal Reserve President
John Williams, signaled support for keeping up purchases of
housing-backed bonds even if the Fed starts cutting back on its
overall bond purchase program.
"The evidence shows pretty convincingly that MBS purchases
have had the biggest bang for the buck on private borrowing
rates in the economy," Williams told reporters after a speech
here. "If I wanted to keep supporting the economy, I think the
MBS is the more powerful" tool.
Williams, who earlier in the day called for possible
reductions in Fed bond purchases as soon as this summer, said he
did not want to be pinned down to predicting a change of policy
for any particular Fed meeting. The Fed's policy-setting panel
next meets in mid-June.
He also said that he has personally always believed summer
begins when school gets out, in mid-June.