The job market and overall economy may be strong enough in a few months to allow the Federal Reserve to pare its bond-buying program a bit, one of its most dovish policymakers said Wednesday.
Halting the Fed's monthly purchases of $85 billion worth of Treasurys and mortgage-backed securities would be "premature" now, Boston Federal Reserve Bank President Eric Rosengren told the Economic Club of Minnesota.
But, he added, "I would also say that it may be undesirable to abruptly stop purchases, so it may make sense to consider a modest reduction in the pace of asset purchases if we see a few months more of gradual improvement in labor markets and improvement in the overall growth rate in the economy."
Rosengren said such improvements are consistent with his current expectations.
Fed policy hawks have called for months for a reduction in its bond-buying program. But Rosengren's comments, hedged as they were, signal growing support closer to its policy-making core for possibly cutting monetary stimulus as early as this summer.
Financial markets have been pricing in a quicker end to the program since Fed Chairman Ben Bernanke said last week that a decision to scale back the program could come in the next few meetings of the central bank's policy-setting panel.
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Better-than-expected data from the housing sector and higher consumer confidence have also stoked such expectations.