NY Fed's Logan says Fed's actions improved market functioning but officials remain vigilant
July 15 (Reuters) - Financial markets have improved notably since mid-March when fears about the spreading coronavirus led to instability in key markets, but Federal Reserve officials stand ready to act should markets deteriorate further, a senior New York Fed official said on Wednesday.
The Fed's purchases of Treasury bonds and mortgage-backed securities were "unparalleled" in their scale and speed, amounting to more than $100 billion on some days, said Lorie Logan, an executive vice president at the New York Fed and the manager of the System Open Market Account (SOMA).
Now that markets are stable, the New York Fed is working to sustain market functioning by continuing to purchase about $80 billion a month in Treasury securities and about $40 billion in mortgage-backed securities, she said.
"Although market functioning has improved markedly since the period of extreme stress in mid-March, uncertainty about the course of the pandemic makes it prudent to protect against further shocks," Logan said in remarks prepared for a webinar organized by the Securities Industry and Financial Markets Association. "We will remain vigilant for signs of deterioration in market functioning and flexible in adjusting our operations as needed."
(Reporting by Jonnelle Marte Editing by Chizu Nomiyama)
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