Monetary policy

The Federal Reserve’s balance sheet will be reduced substantially, but not to the $1 billion level from before the financial crisis, Federal Reserve Board Chair Janet Yellen said.

Unwinding the Federal Reserve’s balance sheet should start “sooner rather than later,” Federal Reserve Bank of Kansas City President Esther George said Wednesday.

Federal Reserve Board Chair Janet Yellen said Wednesday that although the timing of balance sheet normalization beginning “doesn’t matter a great deal,” she would like to see it start “relatively soon.”

It’s “premature” to decide inflation won’t go back to 2% in the coming years, and the Federal Reserve will alter its course if the inflation undershoot is “persistent,” Federal Reserve Board Chair Janet Yellen said Wednesday.

Federal Reserve Chair Janet Yellen said the U.S. economy should continue to expand over the next few years, allowing the central bank to keep raising interest rates, while also stressing the Fed is monitoring too-low inflation.

Calling the “normalization of the federal funds rate … well under way,” Federal Reserve Board Governor Lael Brainard said it is almost time for balance sheet run off.

In its semiannual monetary policy report to Congress, the Federal Reserve Board gave no new insight into its current policy stance, when it might raise rates again or when it would initiate a change to its reinvestment policy.

Uncertainty surrounding U.S. government policy may be holding back economic growth because of its negative impact on business investment, Federal Reserve Vice Chairman Stanley Fischer said.

A divided Federal Reserve policy committee couldn’t reach agreement in June on the timing of when to begin shrinking its massive balance sheet, according to minutes of the meeting.

Federal Reserve Chair Janet Yellen was treated for a urinary tract infection over the weekend, the Federal Reserve said Monday.