Kansas City Fed president Esther George is on the wires saying:
- Current very accommodative stance of monetary policy is out of sync with the economic outlook
- Potential costs associated with an excessively large Fed balance sheet should not be ignored
- More aggressive reduction on Fed balance sheet could allow for shallower path for policy rate
- Could be appropriate to move earlier on the balance sheet relative to the Fed's last tightening cycle
- monetary policy can support economic expansion by smoothing out demand growth to allow a supply time to catch up
- Ongoing influence of the coronavirus has obviously added uncertainty to the economic outlook.
George's comments on the balance sheet puts her in the more hawkish group of policy makers. Powell and Daly are not as aggressive in their assessment on the balance sheet. Daly today said
- Balance sheet policies will be predictable, and will be in the background: will adjust if needed but won't be adjusting it meeting by meeting
- We will deliberating about Fed's balance sheet and coming meetings
