Clarida: No change yet in pace of Fed purchases of Treasuries, MBS

While pointing to a strengthening economy, the Fed’s vice chair on Wednesday indicated no plans for the present to slow the Fed’s purchases of Treasury and mortgage-backed securities, adding that any change in purchases will be announced in advance.

“In our December 2020 FOMC (Federal Open Market Committee) statement, we indicated, and have reaffirmed since then, that we will maintain the pace of Treasury and MBS purcases at $80 billion and $40 billion per month, respectively, until ‘substantial further progress’ has been made toward our maximum-employment and price-stability goals,” Clarida said in a speech Wednesday at the Peterson Institute for International Economics, Washington, D.C., which was webcast.

Clarida said the economy has improved since that meeting, and the FOMC last week reviewed considerations around how the Fed’s asset purchases might be adjusted when economic conditions warrant a change. He said participants in the FOMC meeting expect to see continued economic movement toward the standard of “substantial further progress” and that the panel will continue to assess the economy’s progress toward the Fed’s goals in coming meetings.

Outlooks, Outcomes, and Prospects for U.S. Monetary Policy,” speech by Fed Vice Chair Richard H. Clarida at the Peterson Institute for International Economics, Washington, D.C. (via webcast)