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Jan 12, 2017 08:40 PM IST IST | Source: Reuters

Fed may unwind balance sheet when fed funds hits 1%: Harker

The Federal Reserve can consider beginning to shrink its massive bond holdings once the overnight interbank lending rate hits 1 percent, Philadelphia Fed President Patrick Harker said on Thursday.


The Federal Reserve can consider beginning to shrink its massive bond holdings once the overnight interbank lending rate hits 1 percent, Philadelphia Fed President Patrick Harker said on Thursday.

"When we are at or above 100 basis points - and we are moving toward that - I think it is time to start serious consideration of first stopping reinvestment and then over a period of time unwinding the balance sheet," Harker told reporters in Malvern, Pennsylvania, referring to the fed funds rate for interbank lending which the central bank tries to guide.

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