Fed Officials Keen to Shrink Balance Sheet Despite Low Inflation
- St. Louis Fed’s Bullard says Fed rates should be left on hold
- Missing inflation goal hurts Fed credibility, says Kashkari
David Kotok, Cumberland Advisors chairman and CIO, discusses inflation with Bloomberg's Betty Liu and Kathleen Hays on 'Bloomberg Daybreak: Asia.' (Source: Bloomberg)
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Two Federal Reserve officials said soft U.S. inflation was a problem as they played down the risk of market disruption when the central bank starts shrinking its balance sheet.
The comments on Monday by St. Louis Fed President James Bullard and Minneapolis’s Neel Kashkari, two of the Fed’s more dovish policy makers, line up with expectations that officials will keep interest rates on hold when they meet next month and announce the start of a gradual process to trim their holdings of Treasuries and mortgage-backed securities.