(Reuters) – An increase in bank reserves is putting downward pressure on short-term rates but the Federal Reserve is keeping a close eye on money markets and is prepared to make adjustments as needed, a senior New York Fed official said on Thursday.
With bank reserves rising, the Fed’s facility for overnight repurchase agreements will become a more central part of the central bank’s tool kit for controlling short-term rates, said Lorie Logan, an executive vice president at the New York Fed and the manager of the System Open Market Account.
(Reporting by Jonnelle Marte; Editing by Chris Reese)
