A high-ranking official at the Federal Reserve says the central bank “would absolutely be prepared” to step in and stabilize financial markets if needed, according to a new report.
Federal Reserve Bank of Boston President Susan Collins just assured markets that the Fed will deploy financial firepower if necessary, reports The Financial Times.
For now, Collins says the Fed believes all systems are in working order.
“Markets are continuing to function well… We’re not seeing liquidity concerns overall…
[The central bank] does have tools to address concerns about market functioning or liquidity should they arise…
We have had to deploy quite quickly, various tools [in the past]. We would absolutely be prepared to do that as needed.”
The comments come as global market volatility over President Trump’s tariffs continues.
Amid Trump’s tariff rollouts, the basis trade, which capitalizes on price gaps between Treasury futures and bonds, has suffered a rapid unwind.
The Federal Reserve has previously stepped in to provide liquidity and stabilize the Treasury market during such disruptions.
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