It is a good sign that many of the Federal Reserve's emergency facilities are winding down organically as the economy recovers and markets are no longer reliant on them, a senior Fed official said on Tuesday.
Philadelphia Federal Reserve Bank President Charles Plosser, answering reporters' questions after a speech to an economic seminar, said he hoped conditions won't be considered unusual and exigent past the date many facilities authorized under Section 13 (3) of the Federal Reserve Act are set to expire.
A number of these emergency facilities are set to expire in February and their extension would require the Fed to determine conditions in markets are still unusual and exigent.
I hope conditions won't be unusual and exigent, past those dates, Plosser said.
Asked whether the Fed's mortgage-backed securities purchase program should be kept alive past its expiry date at the end of the first quarter as St. Louis Fed President James Bullard has advocated, Plosser said he didn't see a necessity for that at the moment.
I don't know what keeping it open means. We're either buying or we're not, Plosser said. I don't right now see a necessity (to extend the program), the economy is improving.
Plosser will not have a vote on the Fed's policy-setting committee until 2011.
(Reporting by Kristina Cooke; Editing by James Dalgleish)