February 10, 2010 / 7:32 PM / 10 years ago

RPT-Fisher says Fed will use interest on reserves

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DALLAS, Feb 10 (Reuters) - The Federal Reserve has enough tools to withdraw extraordinary monetary stimulus from the financial system when the time is right, Dallas Fed President Richard Fisher said on Wednesday.

These include the ability to pay interest on reserves.

“It’s a tool that we will use,” Fisher said in response to audience questions at an event in Dallas.

“It would be a way to lessen the impact of having those reserves go back in the system, assuming the velocity of transactions picks up, creating inflationary impulses.” (Reporting by Ann Saphir; Editing by James Dalgleish)

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