Fed may not shrink swollen portfolio to pre-crisis size: Harker
[NEW YORK] The Federal Reserve, which ran up its balance sheet to nearly US$4.5 trillion in recent years, may not eventually shrink it to its pre-crisis size of about US$900 billion, Philadelphia Fed President Patrick Harker said on Monday.
It is "not so obvious" that the portfolio would return to that size, Mr Harker said. The Fed is currently studying and yet undecided what the appropriate size should be given lower expected long-term rates, he added, echoing comments earlier on Monday by San Francisco Fed President John Williams.
The US central bank has long said only that it plans to shrink its swollen portfolio of bonds once it raises interest rates rise higher.
REUTERS
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