Rosen Glenn spoke in Hong Kong and defended his debt-buying initiatives firmly. Bond purchasing is one of the most controversial actions taken by Federal Reserve policy makers in response to the 2008 global financial crisis.
He is the third Federal Reserve policymaker in two days to express his views on what bonds the Fed should hold and why. The president of the Federal Reserve Bank of Chicago and Philadelphia had already stated their views.
Rosenglan has the right to vote on the Federal Reserve's decision-making committee this year. He pointed out that holding short-term bonds could help Fed officials exchange longer-term bonds in future crises, thereby lowering long-term interest rates without expanding their balance sheets.
"Increasing the share of Treasury bills and accelerating the reduction of the duration of securities held may be an important goal in the normalization process," he said at the CSGN.S Asian Investment Conference.
"Thus, in the next severe downturn, the Fed will have room to extend the life of assets on its balance sheet."
He said interest rates could hit the bottom of near zero again during the recession, and bond purchases would be one of the options. The Fed's current short-term interest rate target is 2.25-2.5%.
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