Mester continues her comments by saying:MBS sales it could mean market losses for central bankLosses would mean lower Fed remittances to treasury, though pose no operational problem for the Fed itselfWould help return balance sheet to primary treasuries, but could mean realizing losses depending on interest rates at the time Losses would also be a communications challenge for Fed to explain why benefits of the smaller balance sheet are worth itFinal size of balance sheet will be determined by monitoring market developments as Fed holdings declineOh… the challenges of legging out of trades him.
More from Mester: MBS sales could mean losses for central bank
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