Minneapolis Fed President Neel Kashkari said on Thursday that the Federal Reserve will take into consideration the state of government efforts to raise the federal debt limit in deciding when to start winding down the central bank`s large bond portfolio.
"I think you would expect to see us also look at the debt ceiling negotiations that are happening in Congress," Kashkari said at a Rotary Club event in Edina, Minnesota. "I think we want to keep our eyes open to that process."
In minutes of its last policy meeting in July, released on Wednesday, the Fed reinforced expectations that it will announce when it will start to wind down its $4.2 trillion bond portfolio at its next meeting on Sept. 19-20.
The U.S. government is bumping up against its debt ceiling, with the possibility that it will be unable to pay all its bills in October unless Congress approves an increase in its borrowing capacity.
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