Kocherlakota: Big Fed Balance Sheet Could be New Norm


The Federal Reserve does not need to trim its very large balance sheet to be able to raise rates, and indeed a large balance sheet could be the new norm for the U.S. central bank in the future, a top Fed official said on Tuesday.

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Minneapolis Fed President Narayana Kocherlakota, who wants to wait until the second half of next year before raising rates, also told the Bismarck-Mandan Chamber of Commerce that the Fed will be able to start hiking rates as fear and uncertainty ebb from the "psyche" of U.S. consumers and businesses.