Roberto Perli, a New York Fed official responsible for monetary policy, said on Tuesday that the central bank's current rate control toolkit would still be effective in a system with lower bank reserves.
Perli, manager of the New York Fed's System Open Market Account, also noted that the pace of future Treasury bill buying will depend on market conditions.
"While the current framework is highly effective, there is active public debate about the quantity of reserve supply," Perli said in prepared remarks for a conference hosted by the Atlanta Fed.
"The current ample reserves framework is well equipped to handle a reduction in the SOMA portfolio if changes allow lower reserve levels," he added.
The Fed reduced its Treasury bill purchases from $40 billion per month to $10 billion. Perli said purchases could be adjusted up or down as needed.
