Unnamed Fed Officials

A senior Federal Reserve official said the central bank’s silence on the Master-Liquidity Enhancement Conduit – or super SIV – has been “misconstrued” as opposition or lack of support for the proposal.

“The silence has been misconstrued,” the official said. “The proposal looks reasonably well designed and has the potential to contribute – rather than to impair – improvements in these markets and the process of price discovery.”

There's a lot of momentum and support to do something," Christopher Waller, director of research at the St. Louis Fed, told Reuters in an interview.  "It's just how huge, and is it going to be time-dependent or state-dependent. ... The likelihood we do something is probably pretty high," he said.

...

"There's a lot of credibility to it that if we were going to (move) the fed funds rate 25 basis points meeting to meeting ... that's kind of like a $250 billion purchase intermeeting," Waller said. "The only thing that's tempering that number back for us is we're worried about the optics of that in terms of monetizing the deficit."

As reported by Reuters