Vertiv Introduces New Single-Phase Uninterruptible Power Supply for Distributed Information Technology (IT) Networks and Edge Computing Applications in Europe, Middle East, and Africa (EMEA)Read more Students from JA Zimbabwe Win 2023 De La Vega Global Entrepreneurship AwardRead more Top International Prospects to Travel to Salt Lake City for Seventh Annual Basketball Without Borders Global CampRead more Rise of the Robots as Saudi Arabia Underscores Global Data and Artificial Intelligence (AI) Aspirations with DeepFest Debut at LEAP23Read more Somalia: ‘I sold the last three goats, they were likely to die’Read more Merck Foundation and African First Ladies marking World Cancer Day 2023 through 110 scholarships of Oncology Fellowships in 25 countriesRead more Supporting women leaders and aspirants to unleash their potentialRead more Fake medicines kill almost 500,000 sub-Saharan Africans a year: United Nations Office on Drugs and Crime (UNODC) reportRead more Climate crisis and migration: Greta Thunberg supports International Organization for Migration (IOM) over ‘life and death’ issueRead more United Nations (UN) Convenes Lake Chad Countries, Amid Growing Regional CrisisRead more

Large shifts in monetary policy lead to financial vulnerabilities: New York Fed head

show caption
NEW YORK, NY: New York Stock Exchange (NYSE) trading floor is seen in Manhattan, New York City, United States on October 25, 2021. (Tayfun Coşkun - Anadolu Agency)
Print Friendly and PDF

Nov 17, 2022 - 02:16 AM

ANKARA (AA) – The president of the US Federal Reserve Bank of New York said Wednesday that large and rapid shifts in monetary policy may contribute to stresses and expose vulnerabilities in global financial markets.

“Investors and financial institutions need to adjust to a rapidly changing and highly uncertain environment. And heightened uncertainty can add to market volatility, resulting in diminished market liquidity,” John Williams said at the 2022 Treasury Market Conference in New York.

Williams said monetary policy influences the economy by affecting financial conditions, with the Treasury market at the center.

“For monetary policy to be most effective, financial markets must function properly. If the Treasury market isn’t functioning well, it can impede the transmission of monetary policy to the economy,” he said.

The New York Fed head noted that central banks have been taking strong and decisive actions to restore price stability to fight inflation.

The Fed raised US interest rates by 75 basis points Nov. 2 for a fourth consecutive time, raising the target range for the federal funds rate to between 3.75% and 4% — its highest since January 2008.

While the central bank has raised its benchmark interest rate by a total of 375 basis points, or 3.75%, since March to get control of runaway inflation, there has been a significant downfall in financial markets with many US stocks plummeting, especially in the tech industry, due to lower liquidity and a lack of investment.

MAORANDCITIES.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.