A top Federal Reserve official said the central bank should consider selling bonds from its $9 trillion asset portfolio to address high inflation and guard against harmful effects that can result from raising short-term rates above long-term rates.

In an interview Friday, Kansas City Fed President Esther George said one drawback of expanding the Fed’s asset portfolio to stimulate the economy in downturns, a process sometimes called quantitative easing, is that officials may now face more complications in removing stimulus by using two policy tools—interest rates and the bond portfolio.

This post first appeared on wsj.com

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