Fri, Oct 5 2007, 23:28 GMT
http://www.afxnews.com
WASHINGTON (Thomson Financial) - While it is "premature to judge the ultimate effects" of the Fed's rate cut and other actions on the financial markets or the economy, Federal Reserve Governor Kevin Warsh said it appears that "financial conditions might be normalizing somewhat."
He cited narrowing of interest-rate spreads and improvements in the markets for commercial paper market and leveraged loans.
In a speech New York State Economics Association annual conference, Warsh said "the functioning of several markets continues to be strained" and that strain may continue. A copy of remarks was released in Washington.
In explaining the Fed's recent actions, Warsh said concerns about financial stability "may rightly shape" the policymakers' views about the economic outlook and the risks surrounding it.
Looking forward, he said the Fed policymakers would be relying not only on their economic models but on "real-time, forward looking indicators" to make their judgments.
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