Fed's Mester: Fed should keep the option to sell collateralized mortgage obligations

Jinshi data news on June 24th, Cleveland Fed President Mester will retire at the end of this month, but she still believes that the Fed needs to maintain an open attitude towards actively selling collateralized mortgage obligations, which is part of its ongoing efforts to shrink its balance sheet. While any action to sell collateralized mortgage obligations is not “imminent,” Mester pointed out that the Fed’s current goal is to only hold US Treasuries, which means it may have to take aggressive action to sell mortgage-backed securities (MBS) purchased to restore market functioning and stimulate the economy after the outbreak of the new crown epidemic. Mester said in an interview: “At some point, I will be open to selling MBS. I don’t think we should sell MBS immediately, but eventually we may want to sell such bonds.”