The president of the Federal Reserve (Fed, the US Central Bank) of Dallas, Lorie Logan, said on Monday that there may be some temporary pressure around the tax date and the end of the quarter in September, although the Fed still has room to continue reducing its balance sheet.
“USA has more room to reduce reserve levels,” Logan said at a Mexico BC conference, adding that the “Fed Balance should maintain mainly treasure titles in the long run.”
“As the aggregate levels of reservation decrease, the short -term demand for commercial banks by reservation will probably be higher and less sensitive to interest rate spreads than long -term demand. When a central bank seeks to meet the demand of commercial banks by reserves, it should decide whether this means short -term demand or long -term demand, probably smaller,” said the leader.
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Logan also commented that he expects to use the permanent credit line in September if necessary.
