Fed’s George calls for sharp reduction in size of $8.9 trillion balance sheet

The chief of the Kansas City Federal Reserve on Monday said the U.S. central bank should raise interest rates soon and pursue a big reduction in its nearly $9 trillion stockpile of bonds. Esther George said the economy is fundamentally sound and should expand at a healthy pace in 2022. In light of steady growth and soaring inflation, she said it’s time for the Fed to jettison easy-money policies adopted early in the pandemic.

“With inflation running at close to a 40-year high, considerable momentum in demand growth, and abundant signs and reports of labor market tightness, the current very accommodative stance of monetary policy is out of sync with the economic outlook,” George said in a speech to the Economic Club of Indiana. George is a voting member this year of the Fed’s strategy-making panel known as the Federal Open Market Committee. The Fed last week indicated it’s likely to raise its benchmark short-term interest rate in March barring any …

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www.marketwatch.com/story/feds-george-calls-for-sharp-reduction-in-size-of-banks-8-9-trillion-balance-sheet-11643651062?siteid=yhoof2

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