On the eve of the Fed's annual Jackson Hole seminar, two leading Fed hawks urged policy makers to act quickly to slow the pace of asset purchases, despite the risks posed by the Delta-related outbreak.

"I don't think this has changed my own considerations, which means it's time to start making these adjustments, given the progress we've seen so far," Kansas City Fed President Esther George said in an interview on Wednesday night.

"I think it's important to get started, and I'd like to hear a debate about the conditions related to the pace of bond purchases and when they will end," George said. "but I'm not interested in postponing the decision."

St. Louis Fed President James Bullard echoed this view in an interview on Thursday, saying the impact of the Delta strain may be peaking.

"some on Wall Street seem to think that Delta's numbers are reversing," Bullard said. "I don't know if we can say that, but it will peak at some point. The main message here is that the economy has learned to adapt to the epidemic. "

As investors digested their comments, U. S. stocks fell and Treasury yields rose with the dollar.

George has long been a hawk, and Bullard has become more hawkish this year because of a stronger job market, and both will get a policy vote in 2022. Federal Reserve Chairman Jerome Powell, who will give his views on the policy outlook at a virtual meeting on Friday, is more patient.

George hinted that she might have some flexibility as to when to actually start reducing the size of the code. "I think we should start this year so that we can start to reduce the size of easing."

"the economy continues to grow at a strong rate," George added, adding that with regard to the potential risks posed by Delta, "it is conceivable that it may partially slow the labour market recovery. But now I don't think it will derail the economy as it did when the epidemic first broke out last year. "

Bullard said he preferred to start underwriting in the autumn and end it by the end of the first quarter of next year, which would give the Federal Open Market Committee (FOMC) the option to raise interest rates earlier in 2022 if necessary.

"because there are signs of a housing bubble in the United States, some people worry that asset purchases will hurt more than help," Bullard said.

With the median house price approaching $400000, "low-income groups are being driven out of the market," he added. I'm not sure that's what we want to do. We were in a lot of trouble in the mid-2000s because we were too complacent about house prices. "