WASHINGTON -- The Federal Reserve will likely announce future interest rate changes, Fed Governor John P. LaWare said last week.
Asked in a CNBC 'interview on Friday if the Fed would continue to announce its monetary policy changes, Mr. LaWare said, "It is a little difficult to reverse that precedent," and in fact would be "inappropriate" to do so.
He also suggested tha Fed is not confined about narrowing interest rate spreads for banksthe difference between banks' cost of funds and the amount of interest they earn from the loans they make. "They are fining other ways to make money," Mr. La Ware said.
Banks are now making more from the services they offer, and have effectively retrenched to cut costs. They have been "substituting technology for warm bodies," Mr. LaWare said, and earning greater fee incomes, so a loss of interest income should not be too troubling.
He said that loan demand is still "spotty," but that in some areas it is picking up.
"The banks have been much more willing to lend," Mr. LaWare said.