Officials at the United States Federal Reserve have begun talking about reducing the size of their $45 trillion balance sheet.

But UO economics professor Tim Duy disagrees with that approach in an article he wrote for Bloomberg, saying “it risks financial destabilization by flattening the yield curve, or the difference between short- and long-term bond rates.”

He goes on to commend St. Louis Federal Reserve President James Bullard’s approach. “He sees the economy as stuck in a ‘low-safe-real-rate regime’ and forecasts it will remain in there over the near term,” Duy writes. “And early data suggests that his colleagues are more likely to move in his direaction than vice-versa.”

To read the full article, see “Fed’s Bullard Knows His Treasury Yield Curve” on Bloomberg.

In addition to his professorial duties at the UO, Duy is the senior director of the Oregon Economic Forum and the author of the UO Statewide Economic Indicators, Regional Economic Indicators and the Central Oregon Business Index.