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MNI BRIEF: Bullard Wants Fed Asset Runoff Shortly Post Liftoff

(MNI) WASHINGTON

The Federal Reserve should begin allowing its balance sheet to gradually shrink by capping the reinvestment of maturing securities soon after it starts raising interest rates this year, St. Louis Fed President James Bullard told reporters Thursday.

“It would make a lot of sense to allow the balance sheet runoff soon after the first rate increase,” Bullard said during a press briefing. “Exactly how that would be done has yet to be determined. We want to take some of the same playbook we used last time."

Most Fed officials see three interest rate hikes this year, they said after their December meeting.

MNI Washington Bureau | +1 202 371 2121 | pedro.dacosta@marketnews.com
MNI Washington Bureau | +1 202 371 2121 | pedro.dacosta@marketnews.com

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