WASHINGTON, Sept. 26 (Xinhua) -- The U.S. Federal Reserve Governor Sarah Raskin on Monday urged the Fed to provide " additional monetary accommodation" beyond simply keeping short- term interest rates close to zero to boost the sagging economy and reduce unemployment.
The Fed has been deploying unconventional monetary policy tools to foster job creation and promote a stronger economic recovery given the bleak job market situation, Raskin said at the University of Maryland on Monday.
The Fed announced on Sept. 21 the extension of average maturity of its 400-billion-dollar holdings of government securities to lower long-term borrowing costs and shore up economy, an unconventional monetary policy dubbed as "Operation Twist".
Since late 2008, the Fed has been engaged in two rounds of large-scale asset purchases (LSAPs). The first round involved purchases of about 1.4 trillion dollars in agency mortgage-backed securities (MBS), agency debt securities and about 300 billion dollars in longer-term Treasury securities. The second round of LSAPs involved 600 billion dollars in purchases of longer-term Treasury securities and was completed by June of this year.
The Operation Twist should "exert downward pressure on longer- term interest rates and help make broader financial conditions more accommodative, thereby supporting a stronger economic recovery," Raskin said.
"Given the elevated rate of unemployment and the large number of individuals who are experiencing long spells of unemployment, both fiscal and monetary policy makers should be considering a wide array of approaches for promoting job creation," Raskin added.