By Michael S. Derby
NEW YORK (Reuters) -Federal Reserve Chairman Jerome Powell said Wednesday that the central bank’s power to pay interest on cash that banks park at the central bank is a key part of the Fed’s interest rate control toolkit and would be difficult to unwind.
“If you were to want to go back to a scarce reserves, it would be a long and bumpy and volatile road,” Powell told a Senate committee during testimony. “I wouldn’t recommend that we undertake that road” and if it were done it “would not save any money.”
(Reporting by Michael S. Derby)
