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Fed's Kashkari says policymakers want to trim balance sheet

Neel Kashkari, president and chief executive officer of the Federal Reserve Bank of Minneapolis.
Andrew Harrer | Bloomberg | Getty Images
Neel Kashkari, president and chief executive officer of the Federal Reserve Bank of Minneapolis.

Minneapolis Federal Reserve Bank President Neel Kashkari said Friday that policymakers at the U.S. central bank want to shrink the Fed's massive balance sheet.

"There is interest among FOMC members to start to shrink the balance sheet in a gradual and predictable way," Kashkari said at a banking conference in Minneapolis, referring to the Federal Open Market Committee, which makes the Fed's monetary policy decisions. He added that the U.S. economy is still coming up short on both inflation and employment, so "there's no reason to hurry up and raise rates."

Kashkari was the lone dissenter this month on the Fed's decision to raise the U.S. short-term borrowing rate target a quarter of a percentage point, the third increase since the Great Recession.