WASHINGTON (Reuters) – Yield curve control is a “natural complement” to some other tools the Federal Reserve might use to manage long-term interest rates, Fed Vice Chair Richard Clarida said on Thursday.
As a matter of “good governance” the possible use of yield curve control will be a subject of Fed study in the future since it is now in use by central banks in Japan and Australia, Clarida said in a webcast appearance organized by the New York Association for Business Economics.
But he said “at one level it is a natural complement to calendar-based guidance,” or promises to keep interest rates at a particular level for a certain amount of time.
(Reporting by Howard Schneider; Editing by Paul Simao)
