Money Market Liquidity Remains Robust

By Michael S. Derby

NEW YORK (Reuters) – Despite some recent volatility, money market liquidity remains strong, according to a top New York Federal Reserve official on Tuesday.

Roberto Perli, who manages monetary policy implementation at the Federal Reserve Bank of New York, noted that while the market experienced volatility at the end of September, this does not indicate a scarcity of reserves.

"I want to make clear that there is considerable evidence that reserve supply remains abundant. Quarter-end pressures do not appear to be induced by a scarcity of reserves," Perli stated in his speech.

He added, "Although we are monitoring events closely, there are few obvious and foreseeable risks to our continuing to implement monetary policy efficiently and effectively" on behalf of the rate-setting Federal Open Market Committee.