HIGHLIGHTS-Remarks by Fed officials on June 9

June 9 Mon Jun 9, 2014 4:27pm EDT

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June 9 (Reuters) - The following are highlights from remarks delivered by Federal Reserve policymakers on Monday. For more stories on Fed policy, see

BOSTON FEDERAL RESERVE BANK PRESIDENT ERIC ROSENGREN

(Does not currently vote on Federal Open Market Committee)

Rosengren said the Fed could help smooth the process of tightening policy, and avoiding unwanted financial instabilities, by letting its massive portfolio of assets shrink in a predictable and transparent fashion. "While the optimal program for reducing the Fed's balance sheet will need to be dependent on the state of the economy, the recent tapering experience suggests to me that a predictable, transparent reduction in the balance sheet could be done in ways that may minimize the risk of financial disruption," he said at the Central Bank of Guatemala.

Following the lead of other Fed officials recently discussing how to return to normalcy, Rosengren floated a "seamless continuation" of the regular $10-billion cuts to the Fed's monthly bond purchases. Once the buying ends, he said, the Fed could specify the percentage of assets it would let mature and run off the portfolio naturally, and even raise that percentage depending on economic progress.

ST. LOUIS FEDERAL RESERVE BANK PRESIDENT JAMES BULLARD

(Does not currently vote on Federal Open Market Committee)

Bullard, who has been projecting a rate rise late in the first quarter of 2015, told reporters in Palm Beach, Florida, his projection might shift earlier if new St. Louis Fed forecasts suggest GDP is poised for 3 percent growth, with the unemployment rate moving lower and employment continuing to grow at its recent pace.

If the economy proceeded on that path, with the unemployment rate dropping below 6 percent, he said the conversation at the Fed on monetary policy would shift with "more sentiment toward an earlier rate hike."

Answering audience questions after delivering remarks to a banking group, Bullard said his main concern was that the Fed might move too slowly in tightening policy and allow a bubble to build. He said the U.S. central bank moved too methodically and did not react sufficiently to economic developments in its last tightening cycle in 2004-2006.

In prepared remarks, he said the Fed was much closer to achieving its inflation and employment goals than at any time in the last five years but that monetary policy was still "far from normal."

FEDERAL RESERVE BOARD GOVERNOR DANIEL TARULLO

(Permanent voter on the Federal Open Market Committee)

Tarullo, who did not comment on the outlook for the economy or monetary policy, said making bank directors responsible for regulatory goals as part of their fiduciary duties could help make the financial system safer.

(Compiled by Reuters Federal Reserve reporting team; Editing by Chizu Nomiyama and Andrea Ricci)

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