Fed May Lower Unemployment Threshold, Citigroup’s Sheets Says

The U.S. Federal Reserve today will announce a lowering of its unemployment threshold for ending accommodative policy, said Nathan Sheets, global head of international economics at Citigroup Inc. (C)

The Fed has been “banking on an accelerating economy” and will now have to “fuzz up its threshold for hiking” to an unemployment rate of 6 percent, Sheets said in a radio interview today on Bloomberg Surveillance with Tom Keene and Michael McKee.

Sheets, former head of the Fed’s international-finance division, said the central bank’s asset purchase program “is on a trajectory to $4 trillion” and its balance sheet won’t normalize until 2022.

To contact the reporter on this story: John Tucker in New York at jtucker@bloomberg.net

To contact the editor responsible for this story: Joanna Ossinger at jossinger@bloomberg.net

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