Jeffrey M. Lacker, president of the Federal Reserve Bank of Richmond, said that the economy was strengthening and that consumer spending had rebounded. Mr. Lacker also said the Fed should begin selling the mortgage-backed securities it bought in response to the financial crisis before interest rates are increased. "It makes sense ... to begin normalizing our balance sheet in advance of raising rates," Mr. Lacker said. "Normalizing our balance sheet means reducing its size, (and) also returning to our traditional Treasury-only asset holdings."
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