By Greg Robb
WASHINGTON (MarketWatch) -- The Federal Reserve will start to reduce its balance sheet as soon as it sees convincing signs that the economy is back on track and that banks have power to extend credit, said Richard Fisher, the president of the Dallas Federal Reserve Bank on Tuesday. Fisher said he is cautiously optimistic the economy has turned the corner. But it remains to be seen whether the housing sector can grow without the extraordinary level of government support, Fisher said. Once it is clear that growth is gaining traction, the Fed's tightening program could be as fast as its rate cuts during the financial crisis - if that is what is needed, Fisher said.
