A top U.S. Federal Reserve official says the central bank would likely move in a measured way after it decides to reduce its large bond holdings.
San Francisco Federal Reserve President John Williams said there was a case to be made for moving slowly since reducing the bond holdings would lead to higher longer-term rates even as short-term rates are also being raised.
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Williams said at a conference in Frankfurt, Germany: "As we do both of these, we're going to see a tightening of financial conditions happening in two different ways."
He said that was "one of the arguments to go kind of slow" but added that "my own is that U.S. economy is in a good place" and tightening would not be excessive "as long as we go gradually."