Fed’s Bullard Says Fed May Tighten in 2011 by Cutting Assets
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Federal Reserve Bank of St. Louis President James Bullard said the central bank may tighten policy this year by allowing its balance sheet to decline even with inflation showing signs of slowing in recent weeks.
“I still think it is reasonable” to expect tightening by year end, Bullard said today in a Bloomberg Television interview in New York. “I like a balance-sheet-first policy and I think the Fed will take a balance-sheet-first policy,” he said, referring to the central bank’s option of allowing its total assets to shrink as its bonds mature.