MNI BRIEF: Fed's Barkin: Open Minded on MBS-Led Taper

Federal Reserve Bank of Richmond President Tom Barkin said in an MNI webcast Tuesday he would be "open minded" on phasing out the Fed's mortgage bond buys faster or sooner than its Treasury purchases but would prefer a simple tapering strategy overall.

"I have some preference for the least-drama way of moving back to normal," Barkin said.

Both sides of the debate are "appealing," he added. Even as the housing market is "pretty hot" right now, trying to differentiate the kind of liquidity the Fed is providing markets "feels complicated." "There's some downside to getting too clever," he said. Former Fed officials don't believe agency mortgage-backed securities will get special treatment in the tapering program, MNI has reported.