Steady Rates and Asset Reduction: The Federal Reserve's Strategy

In a recent statement, Christopher Waller, a member of the Federal Reserve Board of Governors, expressed his support for maintaining the current federal funds' target range. Waller highlighted the importance of continuing the pace of decline in securities holdings, despite the banking system's abundant liquidity, which exceeds $3 trillion in reserves.

Waller cautioned against halting the drawdown, emphasizing that the conditions do not yet justify such a move. He also pointed out the necessity for the Federal Reserve to be prepared to act swiftly with existing tools should short-term reserve pressures emerge.