Harker, Patrick on 2017 May 23 at 17:00
I can definitively say that [the normlization process] will be boring.
There are different options under discussion, but we’re looking for a normalization process that is gradual and essentially on autopilot. If something happens, of course we’ll intervene, but we fundamentally want to push the start button and leave it to churn slowly away. We’ll still discuss the balance sheet in meetings, but if things are good, we’ll leave it to gradually unwind in the background. And we’ll let you know. I can say with absolute certainty that markets will get a heads up with a good amount of time. I can also definitively say that it will be boring. It will be the policy equivalent of watching paint dry. Fed presidents had a brief encounter with people finding us interesting over the past few years. Now we’re headed back to the natural state of things, where people try to avoid getting stuck next to us at dinner parties. The funds rate will be our primary monetary policy tool, and we’ll keep the unconventional ones in the arsenal in case we need to use them again, which I hope we won’t. Harker, Patrick