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Jan Hatzius on What’s Next for the Fed

20 MAR 2017 - The Federal Reserve raised its benchmark interest rate last week and signaled to markets it intends to hike twice more in 2017 -- all in line with consensus forecasts. Still uncertain, however, is what it intends to do about its balance sheet. Chair Yellen was noncommittal in her remarks, but Goldman Sachs Chief Economist Jan Hatzius sees late 2017 as perhaps ripe for the Fed to begin preparing investors for a reduction in its holdings of Treasurys and other securities accumulated during its historic asset purchasing program. "We think that is going to potentially take the place of a fourth hike" this year, Hatzius said.