Chicago Fed President Charles Evans said on Thursday that the Fed can begin its balance sheet reduction and raise interest rates in the same meeting, reported Reuters. The risk of slowing the economy into recession isn’t high, Evans said. The Fed won’t need asset sales until it is well into its balance sheet reduction, Evans added but may need a “cleanup operation” to remove mortgage-backed securities.  

Separately, Evans also noted that the data will be an important part of the decisions on the pace and steepness of rate hikes. Evans added that he supports starting to reduce the balance sheet relatively quickly and favours a “pretty brisk pace”. 

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