Fed should pursue “least drama” way of tapering

The U.S. Federal Reserve should taper in the least dramatic way possible when the time comes, Federal Reserve Bank of Richmond President Thomas Barkin said on Tuesday.

“I have some preference for the least drama way of moving back to normal,” Barkin said during a webcast interview with MNI Market News.

Barkin added he was undecided on whether the Fed should begin to wind down its purchases of mortgage-backed securities before Treasuries but that there was some downside to being too intricate.

“I am open minded to it,” Barkin said. “I think whatever we do also has a third criteria which is just simplicity. Is it easy to communicate, do people understand it? I think there is some downside to trying to get too clever in how you move left and how you move right.”