The St. Louis Fed said the move to reduce the level of bonds on its balance sheet will not have any noticeable negative impact on growth.
The Federal Reserve is rebutting President Donald Trump's assertion that tightening monetary policy is hurting the economy.
"It is true that removing unusual monetary accommodation will likely result in less real activity and lower prices than otherwise, but the ongoing shrinkage of the Fed's balance sheet was not responsible for bearish asset markets in 2018, nor is it likely to significantly retard activity going forward," Fed economist Christopher J. Neely wrote.
The president spoke shortly after the Labor Department reported that nonfarm payrolls grew by a better than expected 196,000 in March and the unemployment rate remained at 3.8 percent, near a 50-year low. Despite the solid jobs report, questions remain about the durability of the Trump boom that saw GDP rise 2.9 percent during 2018.
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