The Federal Reserve isn't near a limit on how many Treasury or mortgage-backed securities it can purchase, Federal Reserve President John Williams said in an interview with The Wall Street Journal.
Some Fed officials have been concerned that if the central bank buys too many bonds in these markets it could become such a big player that these markets become illiquid and stop functioning properly. Mr. Williams said the Fed isn't close to causing those kinds of problems. He said he wants to keep buying $85 billiong per month of long-term securities in 2013.
He is in a camp of policy activists at the Fed who want the central bank to keep buying mortgage and Treasury bonds next year to push down long-term interest rates in hopes of boosting the economy.
The Fed next meets Dec. 11-12. It is widely expected to continue its $40 billion-per-month mortgage-bond-buying program. It must decide what to do about its Treasury purchase program, known as Operation Twist. Under the program, which expires at year-end, the Fed is buying $45 billion per month of long-term Treasurys