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Fed wants smallest possible portfolio, says Vice Chair Clarida

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4 years ago

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NEW YORK (Reuters) – The U.S. Federal Reserve ultimately wants to have the smallest balance sheet possible while still being able to control its policy rate, Fed Vice Chair Richard Clarida said on Tuesday.

He said excess bank reserves remain “abundant” in money markets, but warned that the central bank’s portfolio of bonds will not shrink from about $4.2 trillion currently to its pre-crisis size of less than $1 trillion.

Reporting by Jonathan Spicer

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