June 05 2009 - LOCKHART ON FED TIGHTENING Atlanta Fed President Lockhart says today the Fed should not wait too long to tighten monetary policy, though"we're not there yet". He says that boosting the Fed's purchase of Treasury securities is an option, but could have drawbacks. He also says the Fed could raise rates while maintaining expansionary quantitative policies.
His comments were made to Market News. Note that adjustingrates is less problematic for the Fed than selling off its portfolio of assets, since rate adjustment is routine for the Fed.
The combination of the possibility of increased Treasury purchases and hiking rates before selling off balance sheet assets sounds like a policy of curve flattening
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