Fed's Mester says balance sheet reduction likely wouldn't start with asset sales

　　Bond sales are not likely to be a first step for the Federal Reserve as it shrinks the balance sheet, but officials may want to consider selling mortgage-backed securities later on to meet their goal of holding mostly Treasury securities, Cleveland Federal Reserve President Loretta Mester said on Wednesday.

　　“I wouldn't necessarily start with selling assets,” Mester told reporters, adding the Fed would like to primarily reduce the portfolio by letting securities run off the balance sheet.

　　“I'd be comfortable selling some of the MBS because if you look at the Treasury portion of our portfolio, it's shorter duration than it was last time, so they're going to run off faster.”

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