DALLAS (Reuters) - Dallas Federal Reserve Bank President Robert Kaplan said Thursday that it would be wise and reasonable to begin a debate this year on when and how to trim the Fed's $4.5 trillion balance sheet.

It is "reasonable to be having that debate and discussion sometime in 2017 about at least what our plan of action should be," Kaplan said. Any action, he said, should wait until rate hikes are "further along." The Fed will, he said, make progress this year on raising its target policy rate, and he declined to rule out this year for action to slim the balance sheet.

(Reporting by Lisa Maria Garza; writing by Ann Saphir; Editing by Chizu Nomiyama)