NEW YORK, Nov 28 (Reuters) - New York Federal Reserve President John Williams said on Monday he doesn't see any issues with the U.S. central bank's ongoing drawdown of its balance sheet.
The reduction of bonds owned by the Fed is working "pretty much as designed" and there are no signs of a scarcity of bank reserves that would cause the central bank to alter its current path, Williams told reporters after a speech to the Economic Club of New York.
Right now, the Fed is shedding just shy of $100 billion each month in Treasuries and mortgage-backed securities from its roughly $8.6 trillion balance sheet, as a companion to its campaign to hike interest rates.
Both actions are designed to help tighten financial conditions to slow the economy and moderate high levels of inflation. Fed officials have given no guidance when they might stop their drawdowns of the balance sheet, but some analysts think it could happen next year given what they see as increasingly scarce levels of bank reserves. (Reporting by Michael S. Derby; Editing by Paul Simao)
