Fed’s Daly: balance sheet reduction should be gradual, predictable

1 min read
FILE PHOTO: FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses in San Francisco

– The Federal Reserve should reduce its balance sheet earlier in the policy tightening cycle and more rapidly than the last time it did so, San Francisco Federal Reserve Bank President Mary Daly said on Thursday, but the process should also gradual and predictable

“We also need to ensure that don’t need to make adjustments to the balance sheet on each and every meeting, because we just don’t know enough about it to make it a surgical tool,” Daly said at a Bank of England conference. “We are going to need to be very mindful that it needs to be resilient to needing to move faster on the funds rate, or needing to make it slower – a positive shock to the economy, or a negative shock to the economy.”

(Reporting by Ann Saphir)

tagreuters.com2022binary_LYNXMPEI1N19P-BASEIMAGE