The Federal Reserve's aggressive bond purchases, $85 billion a month in mortgage and U.S. Treasury securities, have gone off without a hitch so far, and have not adversely impacted market functioning, the official responsible for implementing the central bank's balance sheet policies said Friday.
In remarks prepared for delivery at a meeting with primary dealers in New York, New York Fed EVP Simon Potter, head of the Markets Group, sought to underline the Fed's commitment to ensuring that its large scale asset purchases are and do not place undue pressure on the markets.
"So far, there seems to be little evidence that the current pace of purchases is straining the market's ability to deliver securities to us," Potter said.
He assured that the desk he oversees closely monitors how its activities impact financial market functioning, and that in addition, "we have developed active policies to help prevent market dysfunction as a result of our operations."
"Overall, I believe the Desk has effectively and efficiently carried out the FOMC's directive to purchase additional Treasury securities and agency MBS in a transparent fashion that achieves the FOMC's policy objectives, supports orderly market functioning, and obtains competitive market prices," Potter said.
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