DALLAS (Reuters) - Reduced Chinese demand for U.S. debt would not likely disrupt the Federal Reserve’s plan to continue gradually shedding its bond holdings, a Fed policymaker said on Wednesday adding it was hard to predict how such a move would play out given record demand in global financial markets.
“We will still plan a gradual phasing out of bonds (and that is) still likely to be eminently manageable,” Dallas Fed President Robert Kaplan said when asked about the report citing Chinese officials saying the market for U.S. Treasuries is becoming relatively less attractive.
“We have to see how those cross-currents play out,” Kaplan told reporters. “It’s hard to predict how the trends unfold ... all in the context of record levels of global liquidity.”
Reporting by Lisa Maria Garza; Writing by Jonathan Spicer