Mester continues her comments by saying:
- MBS sales it could mean market losses for central bank
- Losses would mean lower Fed remittances to treasury, though pose no operational problem for the Fed itself
- Would 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 it
- Final size of balance sheet will be determined by monitoring market developments as Fed holdings decline
Oh... the challenges of legging out of trades him.
