Most of the top Federal Reserve officials said it was likely that the central bank would start to shrink its balance sheet this year, according to minutes of the March policy meeting released Wednesday. Fed officials had an in-depth discussion of the technical details of the balance sheet policy, including whether to phase out reinvestment of principal payments or doing it all at once. Officials supported a gradual pace of rate hikes but said they could change their mind if the economy unexpectedly heated up. There was a lengthy discussion of the stock market, which some Fed officials described as "quite high" by standard valuation measures. Financial conditions were seen as a doubled-edged sword, either potentially providing greater stimulus from consumer spending or downside risks from a significant correction.
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