Fed's George Says She's Not Sure How Markets Will React To Balance Sheet Reduction

By Steve GoldsteinMarketsMarketWatch Pulse

Kansas City Fed President Esther George on Tuesday said she supports the continuation of the normalization of interest rates, even as she acknowledges it's unclear how markets will react to the Fed beginning to reduce its $4.5 trillion balance sheet. "It is difficult to know with a high degree of confidence just how the economy and financial markets will react once the FOMC announces and then takes steps to reduce the size of its securities holdings," she said. George says she would support beginning the process of reducing the balance sheet this year. George isn't a voting Federal Open Market Committee member until 2019.

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