PHILADELPHIA, April 3 (Reuters) - The Federal Reserve could begin shrinking its portfolio of bonds as soon as this year, Philadelphia Fed President Patrick Harker said on Monday, adding his voice to a growing number of colleagues who want to promptly wind down a crisis-era policy.
“Possibly by the end of this year or the beginning of next year would be an appropriate time to stop reinvesting (maturing assets), but that’s all dependent on how the economy evolves between now and then,” Harker told reporters, adding his voice to at least four others at the U.S. central bank including New York Fed President William Dudley, who spoke of the topic on Friday.
“We have to balance this off the path of the fed funds rate. As we cease reinvestment it will remove some accommodation. These two things are related,” he added, reinforcing the growing view that the Fed could temporarily pause interest rate hikes when it starts to trim its $4.5 trillion balance sheet. (Reporting by Jonathan Spicer; Editing by Meredith Mazzilli)