Traders are pulling back from bets the Federal Reserve will raise interest rates in June as inflation expectations crumble.

Federal Reserve Bank of San Francisco President John Williams said it may take the U.S. central bank around five years to shrink its balance sheet to a more normal size once that process gets underway.

Most Federal Reserve officials said they backed a policy change that would begin shrinking the central bank's $4.5 trillion balance sheet later this year, as they reiterated their outlook for gradual interest-rate increases.

Federal Reserve Bank of Richmond President Jeffrey Lacker resigned Tuesday saying he confirmed confidential materials in 2012, according to published reports.

Three rate hikes appear to remain appropriate for this year, Federal Reserve Bank of Philadelphia President and CEO Patrick T. Harker repeated Monday, noting they can be spread out.

The primary muni market has been volatile the past month since the election. Now with 2016 almost over, the Federal Open Market Committee is set to meet on Wednesday with a bump in interest rates widely expected, which would be the first since last December. In the latest installment of Muni Minute, we preview the Fed meeting and speculate on what could follow from the FOMC in 2017.