Economics
Fed’s George Says Rate-Hike Debate Must Include Balance Sheet
- Kansas City Fed leader says 50 basis-point hike is an option
- She urges deliberate moves, including cutting asset holdings
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Federal Reserve Bank of Kansas City President Esther George said raising interest rates by half a percentage point in May will be an option as the central bank confronts the hottest inflation in 40 years, though the size of the increase will need to be weighed alongside plans for shrinking the Fed’s $8.9 trillion balance sheet.
“I think 50 basis points is going to be an option that we will have to consider, along with other things,” George said in a Bloomberg News interview with Michael McKee on Tuesday. “We have to be very deliberate and intentional as we remove this accommodation. I am very focused on thinking about how the balance sheet moves in conjunction with policy-rate increases.”