Wires

Fed's Quarles says 2019 money market friction suggested need for more reserves

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Feb 6 (Reuters) - U.S. Federal Reserve Vice Chair Randal Quarles said Thursday the central bank is evaluating what caused the disruption in money markets last fall.

Unexpected frictions in money markets in mid-September suggested that there needed to be more reserves in the system, Quarles said after delivering a speech in New York.

When figuring out how large to grow the balance sheet, the policymaker said officials should consider how the size of the balance sheet compares to GDP, instead of focusing on the absolute size of the balance sheet. (Reporting by Jonnelle Marte; Editing by Cynthia Osterman)