Another Federal Reserve policymaker on Tuesday backed an emerging U.S. central bank plan to begin trimming its bond holdings later this year, as Kansas City Fed President Esther George warned against waiting too long in order to “overheat” labor markets.
George, a hawkish official who has urged the Fed to hike interest rates, said in a speech the U.S. economy was on “solid footing” with positive surprises more likely than negative ones.
George’s support of a prompt and gradual process of paring some of the central bank’s $4.5 trillion in assets puts her in the majority of colleagues at the Fed.
She added that it should be done “on autopilot,” and not adjusted in reaction to short-term economic data, and that there may be “some tradeoff” with the Fed’s parallel plan to raise rates about three times per year.
“I would support beginning the process of reducing the balance sheet