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Reuters
Central Bank of the United States
Fed member Christopher Waller said Monday that the Fed will not alter the course of its interest rate policy or its bond purchases to help the government finance the deficit.
Waller said during a webinar hosted by the Peterson Institute for International Economics that the belief that the Reserve Board “will give in to pressure to keep interest rates low to help service debt and keep asset purchases for helping fund the federal government is wrong. “
He added that “monetary policy has not been and will not be directed to these ends.”
He affirmed that monetary policy would be determined “exclusively to implement” the goals assigned to the Reserve Board to achieve maximum employment and stabilize inflation.
The Federal Reserve has pledged to keep the benchmark interest rate close to zero and to continue its monthly purchases of $ 120 billion in bonds until further recovery from the economic consequences of the coronavirus pandemic.
At the same time, the federal government has amassed record debt to fund pandemic control measures, something lawmakers are comfortably doing because the U.S. government can borrow money at very low interest rates in international markets.
Source: Reuters.
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