Fed's Potter outlines how they will raise rates….using higher IOER as a magnet. We think RRP is a better tool.
Simon Potter spoke at the SIFMA Conference on Securities Financing Transactions yesterday in New York. Potter is the Fed’s man in charge of open market operations and he explained how the Fed would accomplish normalization (a/k/a raise rates) when the time comes. His speech was entitled “Interest Rate Control during Normalization”.