Federal Reserve (Fed) Bank of Boston President Susan Collins noted that the Fed has multiple monetary policy tools available and at its disposal should market conditions require them, but the Fed policymaker used the opportunity to push against the idea of the Fed using rate cuts first.
Key highlights
The Fed would absolutely be prepared to stabilize financial markets should conditions become disorderly.
Markets are continuing to function well, we’re not seeing liquidity concerns overall.
The Fed has tools to address concerns about market functioning or liquidity should they arise.
The Fed has had to deploy various tools quite quickly in the past.
Fed is absolutely prepared to do that as needed.
Core interest rate tool used for monetary policy is certainly not the only tool in the toolkit.
Interest rates probably not the best way to address liquidity challenges.
Direct action by the Fed depends on what conditions it sees.
The Fed already has additional standings facilities in place to help support market functions.
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