Kansas City Fed President Esther George stated on Tuesday she thinks it will be appropriate to move earlier on reducing the Fed's balance sheet. She also noted that her own preference is to run down the balance sheet "earlier rather than later". In George's view, the Fed's current very accommodative policy stance is "out of synch" with the economic outlook.
The official also said that the coronavirus pandemic is likely to weigh on labor force participation, lead to prolonged supply chain disruptions, and slow rotation of spendings to services from goods. However, she noted, that the economic activity has become more resilient to surges in covid cases and that the jobs market looks tight.