(Reuters) – The U.S. central bank has room to expand its balance sheet, but with long-term borrowing costs already low, what businesses and households really need is more government grants and aid, Chicago Federal Reserve Bank President Charles Evans said on Wednesday.
“I think we have the capacity to do more asset purchases,” Evans told reporters. The Fed could also ease financial conditions by weighting its purchases to more longer-term securities, he said. But though there will come a time when the Fed will need to give more explicit guidance on the pace and type of its asset purchases, Evans said he is comfortable with the Fed’s current guidance that focuses on the path of interest rates.
(Reporting by Ann Saphir; Editing by Andrea Ricci)
