U.S. Markets

Bullard: Fed's policy message 'blurred' by actions in short-term markets

ST. LOUIS (Reuters) - Ongoing Fed interventions in short-term money markets have “blurred” the central bank’s message on monetary policy, St. Louis Federal Reserve bank president James Bullard said on Tuesday, again advocating that the Fed set up a permanent “repurchase” program to make those interventions less necessary.

Monthly purchases of short-term Treasury bills have been interpreted by many investors as an effort to ease monetary policy, Bullard said, even though the Fed does not intend it that way.

“The blurring between what the (Federal Open Market Committee) is trying to do with monetary policy and what the (New York Fed) is trying to do to control short-term rates is inappropriate,” Bullard said. “We need to get going on this,” and create a permanent fix for those liquidity issues.

Reporting by Howard Schneider; Editing by Andrea Ricci