Federal Reserve Bank of Atlanta President Dennis Lockhart stressed Friday that now is not the time to alter monetary policy but said the Fed will provide guidance to the financial markets before eventually moves away from its easy money policies.
He said that the Fed would eventually raise interest rates and reduce swollen balance sheet by selling Treasurys or mortgage-backed securities.
"We must explain that well in advance, in order to avoid disruption to markets and not give way to bad leadership in the markets," he said, speaking at a breakfast hosted by the Forum Memphis economics. He said that the reduction of the Fed's balance sheet will take time.
"We must do so in a way very reasoned, methodical and non-market disruption," he added.
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