IRVINE, California (Reuters) - The U.S. Federal Reserve could buy more Treasuries than it is currently purchasing without disrupting the market, a top Fed official said on Monday.
John Williams, president of the San Francisco Federal Reserve Bank, did not advocate for the purchase of more long-term Treasuries, which it is currently buying at a rate of about $85 billion a month.
But in remarks over dessert on the University of California, Irvine campus, Williams said it certainly had room to increase purchases.
“I think we could, especially in the Treasury space, buy more without impeding market function,” he said.
The Fed’s current Treasury-buying program ends in December, and Williams has said he believes the U.S. central bank should continue to buy Treasuries outright after the start of the year in order to bring down unemployment. Those purchases would come on top of the $40 billion a month in mortgage-backed securities the Fed has been buying since September.
Speaking on the eve of the U.S. presidential election, Williams also emphasized the Fed’s long-term goals, contrasting them with the often short-term goals of politicians.
“I am very pleasantly astonished in some sense how the Fed… can stay away from political decisions in terms of our policies,” he said, declining to comment on how the election outcome might affect the economy, but expressing optimism that whoever wins, Congress and the administration will resolve the country’s fiscal problems.
“The decisions we are making are not designed for the short run.”
Reporting by Ann Saphir; Editing by Lisa Shumaker