MNI BRIEF: Fed's Bullard Looking for Runoff Soon After Taper

St. Louis Fed President James Bullard expects the U.S. central bank to run off some balance sheet assets soon after it completes tapering early next year, while dismissing the chance for outright selling.

"You would want to let the market pricing sort of come back in and one way to do that would be to allow the runoff in the balance sheet," said Bullard, citing concerns about an "incipient" housing bubble. "Usually markets don't react that much to that and I'd expect that this time around."

"The Committee has not wanted to sell in the past, so I guess I'd be happy at this point with a runoff policy, but I think we might as well get going on during this space here," he said in an online event with MarketWatch. Current and former Fed advisers have told MNI the likelihood the central bank could signal a taper in September has increased.