Yellen Sets High Hurdle for Reducing Fed's Massive Bond Holdings
- Fed chief says focus is on raising interest rates instead
- JP Morgan’s Feroli doesn’t sees balance sheet cut until 2018
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Federal Reserve Chair Janet Yellen set a relatively high hurdle for shrinking the central bank’s balance sheet, leading some analysts to conclude that such a move won’t occur this year.
She told the Senate Banking Committee on Tuesday that the Fed’s focus was on raising interest rates to keep the economy in balance, and not on reducing its holdings of bonds.