2017.03.2202:24:00UTC+00Mester Favors Shift in Reinvestment Policy this Year

Federal Reserve Bank of Cleveland President Loretta Mester stated that if the economy continues to sustain its pace of growth, she will back the U.S. central bank taking actions that would start reducing its $4.5 trillion balance sheet.

In her address at an event in Richmond, Virginia, Mester said that if the economy continues to progress in line with her expectations, she would be inclined towards changing the central bank's reinvestment policy this 2017.

The Fed has built its asset portfolio over the years via bond-purchasing in an attempt to jumpstart employment and investment when interest rates were ultra-low in the aftermath of the financial crisis.

Mester said that such move would be in accordance with the Fed's often-reiterated phrase that it would begin to tackle the massive size of its balance sheet when the cycle of normalizing interest rates was in motion.

Fed Chair Janet Yellen made an allusion to debate within policymakers during its last meeting in March on when to make changes to the policy. Mester did not disclose additional details when questioned, other than stating that policymakers are taking about implementation and its possible timetable.