NY Fed's Perli says a plausible path to lower reserve levels is regulatory change; Fed's rate control toolkit has worked very well

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NY Fed's Perli says a plausible path to lower reserve levels is regulatory change; Fed's rate control toolkit has worked very well

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  • Fed liquidity management has been effective. 
  • Future Fed reserve management bill buying driven by market conditions. 
  • Fed toolkit can deal with changing bank reserve regulations. 
  • Shifting to scarce reserve system would be challenging.

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