May 21, 2020 / 6:12 PM / 4 days ago

Yield curve control a 'natural complement' to some possible Fed tools, Clarida says

FILE PHOTO: Federal Reserve Vice Chair Richard Clarida talks on the phone during the three-day "Challenges for Monetary Policy" conference in Jackson Hole, Wyoming, U.S., August 23, 2019. REUTERS/Jonathan Crosby/File Photo

WASHINGTON (Reuters) - Yield curve control is a “natural complement” to some other tools the Federal Reserve might use to manage long-term interest rates, Fed Vice Chair Richard Clarida said on Thursday.

As a matter of “good governance” the possible use of yield curve control will be a subject of Fed study in the future since it is now in use by central banks in Japan and Australia, Clarida said in a webcast appearance organized by the New York Association for Business Economics.

But he said “at one level it is a natural complement to calendar-based guidance,” or promises to keep interest rates at a particular level for a certain amount of time.

Reporting by Howard Schneider; Editing by Paul Simao

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