Fed governor Lael Brainard is convenient to start the process of reducing the u.s. central bank’s balance sheet within the card.
The she said in a speech on Tuesday, according to Bloomberg News.
”If the statistics continue to confirm a strong labour market and strong economic activity, so I think it will be appropriate to soon begin the gradual and predictable process to reduce the balance sheet,” said Brainard in his speech.
Lael Brainard entered at the same time that interest rates are not far from a level where it neither stimulates or discourages economic growth.
She further said that she will assess the rate of inflation before she decides on further interest rate hikes, and that she considers the repo-rate path in the light of recent weak inflation.
Lael Brainard wants to move out cautiously with further interest rate hikes and look carefully at the path of inflation.
She said that the exchange rate may be more sensitive to interest rates than for the balance sheet and that the choice between interest rates and balansräkningsåtstramning playing the role of the exchange rate.
She further noted that the global economy is experiencing a synchronized growth.
At a question and answer session, said she to the neutral interest rate is likely to remain low in the medium term and that normalization of the balance sheet will be made over several years.
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