New York Fed President John Williams said yesterday that the asset purchases are “serving their purposes really well right now”. The purchases are providing support for smooth market conditions, as well as holding down longer-term yields. The program could be adjusted if needed, but he gave no indication for the need of imminent change. .
On negative interest rates, Williams said they are “a possible option but I think have less benefits relative to costs. Forward guidance and asset purchases would continued to be the “primary tools for policy”.
Separately, St. Louis Fed President James Bullard said “there’s light at the end of the tunnel” with vaccine developments. “In terms of being able to see the end of the crisis, that’s very much a realistic view at this point.”
