Fed Gives Markets Clues on Exit Path From Unprecedented Easing
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The Federal Reserve is trying to let investors know that, even as it pursues an unprecedented expansion of monetary stimulus, it hasn’t forgotten about exiting.
In the week after the Federal Open Market Committee’s Jan. 25-26 meeting, policy makers issued three announcements about expanding the number of counterparties for transactions that will help drain the record amount of cash added to the financial system. Brian Sack, the New York Fed’s markets-group head, added more details about the preparations in a Feb. 9 speech, and New York Fed President William Dudley reiterated last week that officials have the ability and will to withdraw their stimulus when necessary.