Fed Needs to Cut Rates or Raise Purchases

The United States Federal Reserve is facing one of two tough choices, to either cut interest rates or increase asset purchases, according to new research by the Fed’s economist Michael Kiley, Bloomberg reported.

President of the Federal Reserve Bank of Cleveland, Loretta Mester, is the only member of the Fed’s board who has voiced her support for shifting asset purchases to longer-dated bonds.

However, Mester is not in favor of raising asset purchases in the meantime.

It is worth noting that although none of the Fed’s monetary policymakers supported any of the aforementioned options, they repeatedly said that all options are on the table to help the American economy in the face of the COVID-19 crisis.