The Federal Reserve is likely to tighten monetary policy by year-end, first by letting a runoff of its balance sheet occur, though it is “reasonable to expect a fed funds rate increase” in that time frame  as well, according to Federal Reserve Bank of St. Louis president James Bullard.

Cautioning that the Fed needs to see more data before planning its next move, Bullard said growth in the first quarter was “a bit softer than expected” and joblessness remains high, so there will be no hurry to tighten policy.

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