Federal Reserve Board governor Kevin Warsh said Friday the central bank has begun its exit from unprecedented financial rescue efforts, given the conclusion of most of the special liquidity facilities it created in the throes of financial crisis.

But Warsh differentiated between exiting from those facilities and exiting from the Fed’s easy monetary policy.

As the Fed proceeds with its exit strategy, he said it is important that the Fed do so in ways that are “understandable ... credible and predictable.”

Warsh, speaking extemporaneously as a panelist at a conference sponsored by the Levy Economics Institute, said the economy is in a “cyclical recovery,” but it remains unclear what the longer term trends of growth and employment will be. He said that is something the Fed will be trying to determine.

— Market News International

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