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MNI: George Argues For Steady Fed Rate Increases Over Speed

(MNI) WASHINGTON
(MNI)

Kansas City chief suggests Fed should announce desired reserve levels as balance sheet shrinks.

Kansas City Fed President Esther George Friday said the case for continuing to remove policy accommodation is clear but argued for a steady path over speed, while warning uncertainty about the tightening pace contributes to market volatility that could be important amid balance-sheet runoff.

"With the policy rate still relatively low, the balance sheet still near $9 trillion, and imbalances in the economy still holding up inflation, the case for continuing to remove policy accommodation remains clear-cut," she said. "The key questions are by how much and how quickly."

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Kansas City Fed President Esther George Friday said the case for continuing to remove policy accommodation is clear but argued for a steady path over speed, while warning uncertainty about the tightening pace contributes to market volatility that could be important amid balance-sheet runoff.

"With the policy rate still relatively low, the balance sheet still near $9 trillion, and imbalances in the economy still holding up inflation, the case for continuing to remove policy accommodation remains clear-cut," she said. "The key questions are by how much and how quickly."

Keep reading...Show less