Feb 6 Simply letting purchased bonds mature in
the years ahead would shrink the Federal Reserve's swollen
balance sheet fairly quickly without the need to actively sell
them, a top U.S. central banker said on Thursday.
"Our intention is to get back to a more normal size balance
sheet," Boston Fed President Eric Rosengren said at a Florida
conference, acknowledging the risk that interest rates are
likely to rise in the future, leading to possible losses on the
balance sheet that is now worth $4 trillion and growing.
"If we stopped purchasing mortgage backed securities, that
part of the balance sheet comes down actually relatively
quickly," he said.
As for the purchases of longer-term Treasury bonds,
Rosengren said that side of the balance sheet also declines
"surprisingly quickly by just not doing any purchases and not