The $9 trillion balance sheet will need to decline significantly, Kansas City Fed president says
Kansas City Fed President Esther George Daniel Brenner\/Bloomberg
The Federal Reserve must more swiftly away from its current monetary policy stance that is as easy as it has ever been at a time when inflation is well above the Fed\u2019s target and labor markets are tight, said Kansas City Fed President Esther George, on Wednesday.
\u201cGiven the state of the economy, with inflation at a 40-year high and the unemployment rate near record lows, moving expeditiously to a neutral stance of policy is appropriate,\u201d George said, in a speech to the New York Economic Club.
George, who is a voting member of the Fed\u2019s interest-rate setting committee this year, said she supported \u201ca steady, deliberate approach\u201d to hiking interest rates.
In addition, George said the Fed needs to \u201csignificantly\u201d reduce its balance sheet. The size of the balance sheet is playing a role in the flattening and inversion of the yield curve, she said.
Overall, George said that he Fed could possibly engineer a soft landing for the economy. However, she noted that inflation could stay high, even as the economy slows and the labor market falters.
Under this scenario, \u201cpolicymaker resolve could be tested,\u201d she said, adding that \u201cThe landscape we face is murky. Uncertainty and risks seem likely to accompany each step on the path to policy normalization, demanding equal doses of flexibility and resolve,\u201d she said.
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The $9 trillion balance sheet will need to decline significantly, Kansas City Fed president saysKansas City Fed President Esther George Daniel Brenner\/BloombergThe Federal Reserve must more swiftly away from its current monetary policy stance that is as easy as it has ever been at a time when inflation is well above the Fed\u2019s target and …<\/p>\n","protected":false},"author":13,"featured_media":53410,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[37,36],"tags":[6885,8496,6858],"class_list":["post-62975","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-forex-markets","category-market-updates","tag-fed","tag-tightening-monetary-policy","tag-us-economy"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/62975","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=62975"}],"version-history":[{"count":2,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/62975\/revisions"}],"predecessor-version":[{"id":62979,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/62975\/revisions\/62979"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/53410"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=62975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=62975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=62975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}