Fed should not be specific on timing of rate rise: Williams

SUN VALLEY, Idaho, June 30 Mon Jun 30, 2014 1:43pm EDT

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SUN VALLEY, Idaho, June 30 (Reuters) - The U.S. Federal Reserve should aim to be less specific, not more, about when it plans to raise interest rates, a top Fed official said on Monday, reiterating his own view that rates should probably rise sometime in the second half of 2015.

The Fed should "stop answering the question" about exactly when it will raise rates, San Francisco Fed President John Williams told reporters after a speech here.

He said he is a fan of the "dot" chart the Fed releases showing the range of individual Fed official views on when rates should rise, because it captures the uncertainty over the outlook.

Williams also said he believes the Fed's $4 trillion-plus balance sheet will eventually shrink "significantly" and said he would prefer the Fed eventually get rid of its mortage-backed securities holdings. Whether it should do so through sales or by letting them naturally run off is an open question, he said, adding that the Fed still has years to make such a decision. (Reporting by Ann Saphir; Editing by Chizu Nomiyama)

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