WASHINGTON — Federal Reserve Bank of Richmond president Jeffrey Lacker maintained his argument that the Fed selling assets on its balance sheet before hiking interest rates is a viable strategy, while voicing his now “marginal” comfort with the “extended period” stance of the Federal Open Market Committee.
Lacker told reporters following a speech late Wednesday that there are advantages to normalizing the Federal Reserve Board’s balance sheet earlier rather than later.
He noted that while the Fed’s mortgage-backed securities holdings continue to skew credit towards the housing sector, the market has stabilized — though at a low level — and he expects that to continue.
“I think that’s a legitimate option,” Lacker said of the idea of selling assets first.
— Market News International