Fed's Pianalto: Fed Must Be Mindful of Risks

Fed's Pianalto: Fed Must Be Mindful of Risks

"Slowing the pace of purchases could help minimize the potential risks associated with our large and growing balance sheet," Federal Reserve Bank of Cleveland President Sandra Pianalto said in the text of a speech.
"Even continuing asset purchases at a reduced pace, and limiting the size of the overall program would enable the Federal Reserve to continue adding accommodation and providing meaningful support to economic growth and job creation," she said.
The central banker noted that the Fed's bond buying, which is causing its overall holdings to grow from already large levels, has "its own uncertainties and risks" which grow as the Fed's portfolio gets bigger.
In continuing to warn about pulling back on what are now $85 billion per month in Treasury and mortgage bond purchases, Ms. Pianalto appears to be concerned about what many see are the rising costs of pressing forward with the stimulus.