BOSTON (Reuters) - The Federal Reserve's eventual decision to shrink its $4.5 trillion balance sheet will have to take into account its effect on financial stability, Fed Vice Chairman Stanley Fischer said on Friday.
"In thinking about when to stop rolling over the debt that the Fed now holds, we've sort of realized that there are a lot of issues which relate to the financial sector that come in, (and that) you start thinking about when you want to ... reduce the size. And what it is that you want to start, by selling mortgage-backed (securities) or the others," he told a conference on macroprudential policy.
"It's not something that we like," he added. "We have the training that it should all be as neutral as possible... But the fact is that there is some room there."