March 17, 2020 / 4:18 PM / 19 days ago

Cleveland Fed's Mester says would support more steps to improve market liquidity

WASHINGTON (Reuters) - Cleveland Federal Reserve president Loretta Mester, the lone dissenter in the Fed’s emergency actions over the weekend, said she supported all of the moves to backstop financial markets but did not want to cut the interest rate to near zero so soon because she does not feel it will have much impact.

Mester did however say she would support further steps by the Fed to get credit flowing, including measures to improve the functioning of the commercial paper market and a term auction facility to encourage the flow of funds to bank. “If market illiquidity continues, I will support our taking further actions to address funding needs, including activating facilities like those the Federal Reserve has used in the past,” Mester said in a written statement.

Reporting by Howard Schneider; Editing by Chizu Nomiyama

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