Fed Needs Mortgage-Backed Securities Exit Plan ‘Earlier Than Later,’ Kansas City Fed President Says
WASHINGTON—Kansas City Federal Reserve President Esther George has urged her colleagues to come to terms “earlier than later” on a plan for the U.S. central bank to exit the mortgage-backed securities (MBS) market and be more explicit on how bond purchases will figure into future monetary policy.
“You can’t just wake up one day and say, ‘hey, we’re going to get out of this business,’” George, who is retiring from her position at the end of this month, told Reuters in an interview published on Monday.
She noted that Fed officials agree in principle that the central bank’s securities portfolio should only include those assets issued by the U.S. Treasury—not those backed by home mortgages—but don’t yet have a plan to get there….