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Following two more expected quarter-point rate increases this year, the Federal Reserve could start to shrink its balance sheet, which, The Wall Street Journal reported, could be later this year or early 2018.

NAFCU Chief Economist and Director of Research Curt Long agreed with that estimate and added that "rates are still too low for the Fed to feel comfortable in beginning to draw down the size of its balance sheet. But that may not be the case much longer, especially if inflation continues to strengthen."

"Before the Fed begins the process of reducing its asset holdings, though, there will undoubtedly be a campaign to communicate to market participants the pace of that process and the ultimate target for the size of the Fed's balance sheet," he added.

The WSJ reported Sunday that the Fed would like to downsize its portfolio for several reasons, among them a stronger economy, the political liability of maintaining a large balance sheet and the relief it could provide to the incoming leadership in 2018 when Fed Chair Janet Yellen's term ends. Downsizing its portfolio would also allow the central bank to ramp it back up if another crisis were to come.

Last week, Yellen said the Federal Open Market Committee, the Federal Reserve's monetary policy setting arm, wants to "be ahead of the curve and not behind it" in terms of raising interest rates appropriately.

After its two-day March meeting, the FOMC announced it would raise the federal funds target rate a quarter-point to a range of 0.75 to 1 percent.